CIRCULAR/ NOTIFICATIONS
1/2016-Cus(NT/CAA/DRI)
Appointment of Common Adjudicating Authority by DGRI
2/2016-Cus(NT/CAA/DRI)
Appointment of Common Adjudicating Authority by DGRI
3/2016-Cus(NT/CAA/DRI)
Appointment of Common Adjudicating Authority by DGRI
cuscir02_017
Amendments effective from 15.01.2017 to the All Industry Rates of Duty Drawback - reg.
CASE LAWS
2017-TIOL-115-HC-MUM-IT
BOMBAY DYEING MANUFACTURING COMPANY LTD Vs ACIT: BOMBAY HIGH COURT (Dated: Janaury 13, 2017)
Income tax - Section 271(1)(c)
Keywords - interim stay on penalty & final disposal of appeal
The assessee preferred the present appeal challenging the order, whereby the ITAT had confirmed the penalty of Rs.4.76 crores levied u/s 271(1)(c).
On appeal, the HC held that,
Whether when the Revenue has no objection to interim stay of penalty order, till final disposal of appeal, the assessee deserves to be granted such stay till the final disposal of case - YES: HC
++ it is seen that Notice of Motion taken out by the assessee seeks a stay of the operation of the impugned order of Tribunal, till the disposal of the present appeal. The counsel appearing for Revenue states that the Revenue has no objection if the impugned order is stayed till the final disposal of the present appeal. In the above view, the order is stayed till the final disposal of the present appeal.
Assessee's stay application allowed
2017-TIOL-114-HC-AHM-IT
E INFOCHIPS LTD Vs DCIT: GUJARAT HIGH COURT (Dated: January 10, 2017)
Income tax - Section 148
Keywords - objections to reopening - reasons for reassessment
The assessee preferred present petition seeking direction for quashing of notice u/s 148 by which the assessment for AY 2011-12 was sought to be reopened alleging inter alia that income chargeable to tax had escaped assessment.
On appeal, the HC held that,
Whether the AO can ignore the objections of assessee while finalizing any order on reassessment and dispose of the matter by passing a cryptic speaking order - NO: HC
++ with respect to the two separate reasons recorded to reopen the assessment, both by different AO, it is clarified that the reasons recorded by the present AO having jurisdiction are to be considered as reasons recorded and the department may be permitted to withdraw the reasons recorded by earlier AO. It is not in dispute that even against the reasons recorded by the present AO, the assessee did submit the objections. However the same has not been dealt with on merits by the AO who has issued the impugned notice u/s 148 on the ground that the same are submitted belatedly. However, it is not in dispute that till Sep 06, 2016 and Oct 18, 2016 the AO had not finalized the reassessment proceeding. Therefore, the AO ought to have considered and disposed of the objection on merits, which the AO is bound to dispose of. Under the circumstances, present petition is disposed of at this stage by directing the AO to consider the objections submitted by the assessee and dispose of the same on merits and pass a speaking order, before finalizing and / or passing any order on reassessment.
Case remanded
2017-TIOL-113-HC-AHM-IT
PR CIT Vs ADANI GAS LTD: GUJARAT HIGH COURT (Dated: January 11, 2017)
Income tax - Section 35D
Keywords - preliminary expediture & prior period expenses
A) The Revenue preferred the present appeal challenging the order, whereby the ITAT had deleted the disallowance of Rs. 10,28,028/- being the preliminary expenditure u/s 35D.
B) The Revenue had also challenged the decision of ITAT in directing the AO to set off prior period expenditure of Rs. 15,25,746/-.
On appeal, the HC held that,
Whether when the claim for preliminary expenditure stand accepted in preceding A.Ys, it will not be open for the Department in subsequent years to disallow the very expenditure u/s 35D - YES: HC
++ as far as allowability of preliminary expenses are concerned, the ITAT has dealt with the same considering the fact that the very expenditure stand accepted in the preceding assessment year and therefore, thereafter it will not be open for the department in the subsequent year to disallow the preliminary expenditure u/s 35-D, the ITAT has deleted the disallowance of Rs. 10.,28,028/- being preliminary expenditure u/s 35-D. It is not in dispute that in the preceding assessment year, very expenditure stand accepted. The issue is squarely covered against the revenue in light of the decision of the Supreme Court in the case of Shasun Chemicals & Drugs Ltd vs. Commissioner of Income TaxII, Chennai 2016-TIOL-163-SC-IT. In the said decision also, the issue was with respect to claim u/s 35D and it was found that expenses claimed by the assessee for first two assessments years were allowed by the AO, the AO in the subsequent assessment year could not have disallowed the same. Under the circumstances, no error has been committed by the Tribunal in deleting the disallowance of preliminary expenditure;
++ so far as question relating to prior period expenses is concerned, the Tribunal has accepted the alternative submission on behalf of the assessee and has directed the AO to set off prior period of expenditure of Rs. 15,25,746/-. The aforesaid issue is also as such concluded by the decision of the Division Bench of this Court in the case of Associate Company of the very assessee i.e. in the case of Principal Commissioner of Income Tax-1 vs. Adani Enterprises Ltd. Even the said issue is also directly covered by the decision of the Delhi High Court in the case of CIT vs. Exxon Mobil Lubricant Pvt Ltd 2010-TIOL-630-HC-DEL-IT. No error has been committed by the Tribunal in accepting the alternative plea and directing the AO to set off prior period of expenditure of Rs. 15,25,746/-. The Tribunal has directed the AO to set off assessee's prior period of expenditure and income as per the law. Under the circumstances, we see no reason to interfere with the impugned judgment and order passed by the Tribunal.
Revenue's appeal dismissed
2017-TIOL-104-HC-MAD-CX
K SREENIVASAN Vs CESTAT: MADRAS HIGH COURT (Dated: December 2, 2016)
Central Excise - Personal Penalty - M/s. Paragon Paper Private Limited are selling the Duplex Boards to the safety matches manufacturers situated in and around Sivakasi, Sattur and Kovilpatti, through M/s. Shri Jaya Muruga Paper Mart, Sivakasi, a partnership firm in which the spouse of the appellant individual is a partner - Officers investigating the clearances at Paragon Paper end, opined that it was effected at undervalued price, that M/s Paragon is receiving amount in excess of invoices raised through SJPM, which are not accounted to evade payment of central excise duty - The adjudicating authority viewed that the individual's statement would reveal that he had paid excess amount to PPPL than what was covered by the bill and had knowledge that PPPL have suppressed the value of paper and hence, there are evidences to show that SJPM and the individuals had the knowledge about the evasion of duty of PPPL - Personal penalty was imposed under Rule 26 of Central Excise Rules 2002 in adjudication and modified by Commissioner (Appeals), further reduced by the Tribunal, and agitated herein as to "Whether the Appellate Tribunal was justified in sustaining the penalty on the husband of the dormant partner, while sustaining the penalty on the Partnership Firm".
Held: The core issue is as to the imposition of penalty on the husband of the agreement partner, viz., the appellant herein is no longer res integra, in the light of the Full Bench judgment rendered by Bombay High Court in Amritlakshmi Machine Works vs. Commr. of Cus. (Import), Mumbai - In the light of the fact that what was canvassed before the CESTAT is only the quantum of penalty, coupled with the fact that the OIO passed by the original authority had also dealt with the factual and legal issues, the Court is of the view that the substantial question of law raised in this appeal is to be answered in favour of the Revenue [Para 8, 9].
Appeal dismissed
2017-TIOL-105-HC-AHM-CX
CCE & C Vs PREMIER ART SILK PROCESSORS: GUJARAT HIGH COURT (Dated: December 19, 2016)
Central Excise - Penalty - Revenue is agitating herein, the Tribunal's order allowing option of payment of reduced penalty under Sec 11AC if paid along with duty and interest within 30 days of receipt of the Tribunal order by respondent. Held: The questions involved in the present appeal are squarely covered against the revenue in light of the decision in the case of Commissioner of Central Excise & Customs, Surat-I Versus M/s. Kanishka Prints Pvt. Ltd., with which the Court concurs; ergo the questions involved in the present appeal stand concluded against the revenue. [Para 2, 3]
Appeal dismissed
2017-TIOL-106-HC-MAD-CUS
MUNIVELU BHARATHI Vs PR CC: MADRAS HIGH COURT (Dated: December 1, 2016)
Customs - Appellate jurisdiction - The petitioners (two NRI and one Indian) had smuggled gold bars/jewellery; they were detained in the Airport and ultimately, the adjudicating authority passed an OIO permitting the petitioner to re-export the gold bars/jewellery on payment of redemption fine and penalty - The OIO was challenged before the Commissioner (Appeals), who ordered a marginal reduction in the redemption fine and penalty - However, the same have not been implemented till date and the petitioner has not been able to re-export the gold bars/jewellery; the representation given by the petitioners were not taken note of and no effective orders were passed by the respondent and therefore, the petitioner is before this Court by way of these writ petitions.
Held: The only issue to be seen is as to whether a direction should be issued to the respondent to release the gold bars/jewellery within a time frame - The only defence raised by the respondent is that the petitioner have filed revision before the Central Government against the orders passed by the Commissioner (Appeals) - Though such revisions are pending before the revisional authority/Central Government, the High Court of Punjab and Haryana in the case of NVR Forgings vs. Union of India ruled that the revision by the Central Government entrusted to a Joint Secretary level officer equal to Commissioner is not empowered to pass revisional order against the order passed by the Officer of same rank - The departmental appeals against this ruling failed before the Apex Court [Para 3, 4]
CBEC, in a communication dated 16.11.2016 stated that the above legal position has been accepted by the Department and they are taking remedial measures - Taking into consideration of the fact that orders have been passed by the Commissioner (Appeals) during September/December 2015, the gold bars/jewellery cannot be endlessly be retained by the Department, more so, when the petitioner has consented before the adjudicating authority as well as the appellate authority who have granted the relief of re-export subject to payment of redemption fine and penalty - In the event there is a re-organization done by the Central Government and the defect pointed out in the case of NVR Forgings is a remedy, then the revisional authority would be entitled to hear the revision petition - the respondent is directed to release the gold bars/jewellery to the petitioner within a period of one week from the date on which the petitioner pays redemption fine and penalty and also furnish a bond securing the interest of the Department that in the event of their success before the revisional authority, they will be able to proceed against the petitioner in terms of the provisions of the Customs Act and Rules framed therein. [Para 5, 6]
Petitions disposed of
2017-TIOL-134-CESTAT-DEL + Story
Sterling Ornaments Pvt Ltd Vs CC: DELHI CESTAT: (Dated: January 6, 2017)
Customs - Brass scrap converted into bricks for ease of clearance - No change in rate of duty - No misdeclaration: The nature of goods is actually not in dispute. The brass scrap arising in the process of manufacture, has been compacted in the form of brick making use of heat of the furnace. Since, the goods do not have the form of loose scrap; Revenue took the view that the appropriate classification will be under 7407210 which covers brass bars. Looking to the shapes in which the goods are being cleared, the classification as a brass bar is more appropriate than the classification as brass scrap. There is no difference in rate of duty between the two classifications. In the Impugned order, mis-declaration has been alleged against the appellant. However, it is obvious that it is a classification dispute. Since two views are easily possible in the classification of a product, mis-declaration with intend to evade payment of duty cannot be alleged. Consequently, we are of the view that the order of confiscation made under Section 111(k) and 111(m) is not justified and is required to be set aside. - para 5
Customs - Valuation: Revenue not in possession of any evidence to conclude that the transaction value is to be disregarded - No Enhancement: It is also on record that the appellant has received payment through cheque to the extent of the value declared in the documents. The only reason cited by Revenue to enhance the value appears to be the nature of the goods. By considering the goods as other than brass scrap, Revenue has gone ahead with enhancement of the value of the goods. We find that such a step adopted by Revenue does not have the sanction of law. Valuation of imported goods is required to be done on the basis of normal transaction value. To disregard transaction value, sufficient reasons should be available. Only if there are valid reasons to disregard transaction value can the Revenue take recourse to the Customs Valuation Rules to redetermine the value. From the records of this case, there are no valid reasons to disregard the transaction value in the present case. Hence, we are of the view that the enhancement of value ordered by Revenue is without justification. - para 6
Appeals allowed in favour of assessee
