CASE LAWS
2016-TIOL-707-HC-P&H-CX
CCE Vs MARUTI SUZUKI INDIA LTD: PUNJAB AND HARYANA HIGH COURT (Dated: February 29, 2016)
CX - SCN was issued to the assessee for recovery of CENVAT credit of Rs. 9,97,38,882/- allegedly wrongly availed and utilised along with interest and penalty - Adjudicating Authority confirming demand along with interest and equal penalty - Tribunal vide order dated 15.1.2015 allowed the appeal by observing thus - "The definition of capital goods as given in Rule 2(a) of the Cenvat Credit Rules, 2004 covers the goods listed in this sub Rule, which have been 'used in the factory of manufacture of final product.' Thus, for capital goods Cenvat Credit, their use in or in relation to manufacture of final product is not required and their use in the factory of manufacture for the purpose whether in or in relation to manufacture or for any other purpose including R&D would be enough for permitting the Cenvat Credit." - Revenue in appeal before High Court.
Held: A perusal of the contents of paragraph 3 (quoted above) shows that it does not satisfy the test of a reasoned and speaking order - Tribunal being a final fact finding authority was required to deal with all aspects of facts and law and then record its conclusions based thereon - No legally justified reasons have been recorded by the Tribunal for allowing the appeal of the assessee - Revenue appeal is allowed and the order dated 15.1.2015 passed by the Tribunal is set aside - Matter is remitted to the Tribunal to decide the same afresh and for passing a well reasoned speaking order after affording an opportunity of hearing to the parties: High Court [para 6, 7, 8]
Matter remanded
2016-TIOL-706-HC-KOL-CX
ROHIT FERRO TECH LTD Vs CCCE: CALCUTTA HIGH COURT (Dated : April 1, 2016)
CX - Rule 12CCC of CER, 2002 - Notifications 14/2014-CE(NT) & 16/2014-CE(NT), both dated 21.03.2014 - Substantial shortage of finished goods alleged - upon visual joint stock verification, a demand of Rs.1,50,05,658/- on account of excise duty was claimed - Notice issued on 30.11.2015 by Office of Chief Commissioner requiring petitioner to show cause as to why action should not be taken in terms of notification 21.03.2014 - petitioner in his reply dated 18.02.2016 referred to the aspect of proposal of the Durgapur Commissionerate not being supplied to them - however, order passed on 15.03.2016 after a hearing - since the show-cause notice of November 30, 2015 issued by the Chief Commissioner to the petitioner did not append a copy of the proposal nor did such notice set out the salient contents of the proposal for the petitioner to make a meaningful representation in such regard, the petitioner only knows that stock shortage was discovered in course of the raid in September, 2015, but the petitioner is not aware of any other misgivings that the authorities may harbour against the petitioner - Since the opportunity afforded to the petitioner appears to have been a meaningless exercise without the petitioner being confronted with the material against the petitioner as may have been contained in the proposal forwarded by the Durgapur Commissionerate to the Chief Commissioner, the order impugned dated March 15, 2016 cannot be sustained and is, therefore, set aside - However, since it is evident that the petitioner has not tendered payment of the entire sum of Rs.1,50,05,658/- pursuant to the joint stock verification conducted in September, 2015, the order of March 15, 2016 will remain unconditionally stayed till the close of working hours of April 5, 2016 and, thereafter, the same will stand set aside, subject to the entire balance payment in respect of the above amount having been tendered by the petitioner to the respondent authorities - Chief Commissioner will be entitled to issue a fresh notice making the petitioner aware of the material contained in any report or proposal that the Chief Commissioner may rely on for such purpose - challenge to the constitutionality of the notification of March 21, 2014 is left open - Petition disposed of: High Court [para 9 to 13]
Petition disposed of
2016-TIOL-502-ITAT-KOL
DCIT Vs AKSHARA SHELTERS CONSORTIUM: KOLKATA ITAT (Dated: January 22, 2016)
Income Tax - Sections 153C & 271(1)(c).
Keywords - penalty, concealment of income, furnishing of inaccurate particulars of income, search and seizure, survey & undisclosed cash receipts.
Whether the issue of jurisdiction to impose penalty in a particular year can be raised at any time in the course of proceedings - Yes: ITAT
Whether for the purpose of assessment of sale consideration and revenue recognition of the project, different treatment can be given to the amount received by cash and amount received by cheque for same very flats or project - No: ITAT
Whether penalty u/s 271(1)(c) can be levied on the ground that but for the search and survey action, the assessee would not have come forward with the offer of undisclosed income by way of disclosure petition u/s 132(4) followed by offering the same in the return filed in response to notice issued u/s 153C - No: ITAT
Whether penalty u/s 271(1)(c) can be levied for concealment of income where the cash receipts on sale of flats as per the seized document was not taxable in the respective assessment year though the same was offered by the assessee itself in that year - No: ITAT
Revenue's appeals dismissed
2016-TIOL-501-ITAT-DEL
DCIT Vs ECO AUTO COMPONENTS LTD: DELHI ITAT (Dated: January 20, 2016)
Income Tax - Sections 35DDA, 36(1)(va), 41(1), 55A & 142A.
Keywords - reference to Valuation Officer, long term capital gain, short term capital gain, long term capital loss, sham transaction, bad debts written off, cessation of liabilities, VRS expenses, late deposit of employees' contribution towards PF, communication expenses, vehicle maintenance expenses, staff welfare expenses, conveyance expenses.
Whether liability can be said to have ceased when the liability qua the amount which is still standing in the balance sheet of the assessee - No: ITAT
Whether when expenses have been made by a company, a juristic person, the disallowance on the ground that the same were of personal nature can be made - NO: ITAT
Case remanded
2016-TIOL-827-CESTAT-MUM
MANGANAG OOS TODANI VAHATUK YANTRANCHI Vs CCE: MUMBAI CESTAT (Dated: February 11, 2016)
ST - Service tax liability on the appellant under the category of 'Manpower recruitment and Supply agency services' for the services rendered by them to M/s. Manganga SSK Ltd. in the form of supply of labour for harvesting and transportation of sugarcane to the sugar factory. Held - It is undisputed that the appellant had undertaken lumpsum activity of harvesting and transportation of sugarcane to the sugar factory - Issue is no more res integra as the Bombay High Court in the case of Godavari Khore Cane Transport Co. P Ltd. - 2015-TIOL-253-HC-MUM-ST, in similar set of facts, held in favour of the assessee holding that the activity will not fall under the category of 'Manpower recruitment and supply agency services' - impugned order is, therefore, unsustainable and set aside - Appeal allowed with consequential relief: CESTAT [para 4, 5]
Appeal allowed
2016-TIOL-826-CESTAT-MAD
VISTEON AUTOMOTIVE SYSTEMS INDIA PVT LTD Vs CCE: CHENNAI CESTAT (Dated: January 7, 2016)
Central Excise - Valuation - The appellant had received a sum of Rs. 43.35 crores from M/s Ford India Ltd towards tool cost for the procurement of specified tools intended exclusively for the manufacture and supply of auto components to M/s Ford India Ltd. - while determining the assessable value of the goods manufactured and supplied to M/s Ford India Ltd, appellant failed to include the amortised tooling cost to arrive at the assessable value for discharging the appropriate duty liability; same later made good - demand for duty adjudicated, amount paid appropriated, and penalty imposed under Sec 11AC and Rule 173Q of CER 1944; agitated herein.
Held: The Central Excise (Valuation) Rules, 1975 were in existence till they were superseded by Central Excise (Valuation) Rules, 2000 by notification No. 45/2000-CE(N.T.) dated 30.06.2000 - Rule 5 of Valuation Rule 1975, contemplated money value of any additional consideration flowing directly or indirectly from the buyer to the assessee to be added to the assessable value - there were doubts among the assessee's and the officers as to whether the cost of tools, moulds and other materials supplied free of cost by the customers, to the assessee, should be included in the assessable value; on which clarity was achieved only after introduction of Valuation Rules 2000, wherein under Rule 6 an explanation was introduced - There is scope for bonafide belief on the part of the assessee that such cost of tools/moulds did not have to be added to the value of goods cleared - appellants paid the entire differential duty as soon as the officers of the department visited the factory, much before the valuation rules 2000 were introduced - Considering the legal and factual position, the penalty imposed is not sustainable as there cannot be any allegation that the appellants had deliberately avoided or evaded payment of the differential duty in question - imposition of penalty is unwarranted; however, interest liability exists and is upheld. [Para 4, 6]
Appeal partly allowed
2016-TIOL-825-CESTAT-MAD
VLV TANR Vs CC: CHENNAI CESTAT (Dated: February 02, 2016)
Customs - Testing of Samples - Test Report of CLRI on the subject of finished leather does not show the test, if any, conducted and the manner in which that was conducted and the norms, if any, followed by that institution to satisfy the requirement of Public Notice - A very cryptic report has been issued stating that the sample does not satisfy the norm without stating what is the norm - a cryptic report sends message to the society that no tests according to law were carried out, and shakes confidence of Public on the national laboratory - Designated Authority of the CLRI, Adyar, Chennai is issued notice to file a reply explaining the tests conducted in respect of the sample aforesaid, manner of conduct of the test thereof, norms followed to conduct the test and whether the test was conducted in the manner and norms prescribed by and Public notice for the satisfaction of law, along with the name and designation of the officer who carried out the test of the sample. [Para 3, 4]
To be listed on 16.02.2016
