2017-TIOL-1615-HC-DEL-IT + Story
PR CIT Vs IL AND FS ENERGY DEVELOPMENT COMPANY LTD: DELHI HIGH COURT (Dated: August 16, 2017)
Income tax - Section 14 & Rule 8D(1) - Circular No. 5/2014
Keywords: Dividend income - Explanatory Memorandum - 'such previous year' - Interest-bearing fund - real income.
The assessee-company is in provision of consultancy services. It filed its return at a loss of Rs. 2,42,63,176/-. The Assessee was asked to explain why disallowance should not be made under Section l4A of the Act read with Rule 8D for the purpose of normal computation of book profit for the purpose of Minimum Alternative Tax (‘MAT’) under Section 115JB of the Act. The response of the Assessee was that it had made investment in mutual funds and that no interest bearing funds were invested to earn tax free income. It accordingly pleaded that no disallowance under Section 14A of the Act was called for.
But the AO rejected the plea relying on the decision of the Special Bench of the ITAT Delhi in Cheminvest Ltd. v. ITO wherein it was held that Section 14A would apply even if during the AY in question, the investment has not actually yielded any exempt income. The AO made an addition of Rs.15,44,43,369/-. The AO held that the Assessee had made investments in shares to the tune of Rs.5,29,38,26,780/- for the purposes of earning dividend income not chargeable to the tax. The AO noted that, even in the tax audit report, the auditors had calculated disallowance under Section 14A read with Rule 8D in the sum of Rs. 5,89,22,873/-, which included direct expenses of Rs. 1,12,025/-.
On apapeal, the CIT(A) reduced the disallowance and also reduced the interest disallowed by the AO. On further appeal, the ITAT allowed the assessee's appeal.
After hearing the parties, the HC held that,
++ we are concerned with the AY 2011-12 and, therefore, the question of the applicability of Rule 8D, which was inserted with effect from 24th March 2008, is not in doubt;
++ the question in the present case is whether the disallowance of the expenditure will be made even where the investment has not resulted in any exempt income during the AY in question but where potential exists for exempt income being earned in later AYs. In the Explanatory Memorandum to the Finance Act 2001, by which Section 14A was inserted with effect from 1st April 1962, it was clarified that “expenses incurred can be allowed only to the extent they are relatable to the earned income of taxable income”. The object behind Section 14A was to provide that “no deduction shall be made in respect of any expenditure incurred by the Assessee in relation to income which does not form part of the total income under the Income Tax Act”;
++ what is taxable under Section 5 of the Act is the “total income" which is neither notional nor speculative. It has to be ‘real income’. The subsequent amendment to Section 14A does not particularly clarify whether the disallowance of the expenditure would apply even where no exempt income is earned in the AY in question from investments made, not in that AY, but earlier AYs. Rule 8D (1) is helpful, to some extent, in understanding this issue;
Whether even if assessee returns no exempt income in a particular assessment year, disallowance of certain expenditure incurred to earn such exempt income is warranted u/s 14 rw Rule 8D - NO: HC
++ the words “in relation to income which does not form part of the total income under the Act for such previous year” in the above Rule 8 D (1) indicates a correlation between the exempt income earned in the AY and the expenditure incurred to earn it. In other words, the expenditure as claimed by the Assessee has to be in relation to the income earned in ‘such previous year’. This implies that if there is no exempt income earned in the AY in question, the question of disallowance of the expenditure incurred to earn exempt income in terms of Section 14A read with Rule 8D would not arise;
++ the CBDT Circular upon which extensive reliance is placed by the Revenue does not refer to Rule 8D (1) of the Rules at all but only refers to the word “includible” occurring in the title to Rule 8D as well as the title to Section 14A. The Circular concludes that it is not necessary that exempt income should necessarily be included in a particular year’s income for the disallowance to be triggered;
Whether, for the provisions of Sec 14A read with Rule 8D to get triggered, it has to be 'real income' as per Section 5 of the Income Tax Act - YES: HC
++ in the considered view of the Court, this will be a truncated reading of Section 14A and Rule 8D particularly when Rule 8D (1) uses the expression ‘such previous year’. Further, it does not account for the concept of ‘real income’. It does not note that under Section 5 of the Act, the question of taxation of ‘notional income’ does not arise. The Court is not persuaded that in view of the Circular of the CBDT dated 11th May 2014, the decision of this Court in Cheminvest Ltd. requires reconsideration;
Whether an auditor's report suggesting disallowance in such a case is determinative of the legal position - NO: HC
++ the mere fact that in the audit report for the AY in question, the auditors may have suggested that there should be a disallowance cannot be determinative of the legal position. That would not preclude the Assessee from taking a stand that no disallowance under Section 14A of the Act was called for in the AY in question because no exempt income was earned;
Whether the CBDT Circular can override the provisions of the Income Tax Act - NO: HC
++ this Court is of the view that the CBDT Circular dated 11th May 2014 cannot override the expressed provisions of Section 14A read with Rule 8D.
Revenue's appeal dismissed
2017-TIOL-1614-HC-MAD-IT + Story
CIT Vs R RADIKAA: MADRAS HIGH COURT (Dated: August 08, 2017)
Income tax - Section 32(1)(ii)
Keywords - non compete fee - remuneration for loss of business - revenue recipt - succession agreement - transfer of assets - depreciation on brand equity
The Assessee i.e., R Radikaa, is an artist and film director with a significant presence in the big as well as small screens. M/s. Radaan Pictures Private Limited, the assessee in TC(A) 1175/2007 had entered into an agreement with Ms.Radikaa, for recognition of her expertise and skill in the area of film making desired to utilise her services and intellectual capacity for the purpose of its business. As per the agreement, the Artist agreed to spend a minimum of four hours a day in providing her expertise in film making & tele seriels. The Artist also agreed that she would not compete with the business of the Company in India or elsewhere and she agreed to take the consent of the Company prior to accepting an engagement as an actor by any other film director. She further agreed to remit 5% of her individual earnings to the Company. The agreement, in force for a period of 5 years provided for consideration, of an amount of Rs. 75 lakhs by way of allotment of 75,000 equity shares of a nominal value of Rs.100/- each. That apart, the parties had entered into a Succession Agreement that provided for the succession of the company to the business of the individual as a going concern, taking over all the assets and liabilities in its books for a consideration of Rs.4,37,38,900/- by way of allotment of Rs.4,37,389/- equity shares of a face value of Rs.100/- each. The entire business of 'Radaan T.V.' thus stood transferred by the individual to the company. Assessments were framed in case of both individual as well as the company. The AO in the case of individual was of the view that the amount of 75 lakhs was in the nature of a remuneration paid to the individual for loss of business occasioned to her by virtue of the terms of non-compete. The AO analysed her business receipts noticing that there was a steady increase in receipts from 1997-98 to 2000-01. In the present A.Y, she received remuneration of Rs.5 lakhs of which, 5 % was handed over to the company in terms of agreement.
Accordingly, the AO arrived at a conclusion that there was drop in business revenue from the sole proprietary that stood compensated by the arrangement for non-compete with the company. The payment of the non-compete fee was thus, according to him, on revenue account. The AO noticed that the individual retained control over the business even after execution of the succession agreement in so far as she continued in the position of a Director in the company holding more than 99.99 percent voting rights. He was thus of the view that the arrangement of payment of noncompete fee was itself a farce and a colourable exercise. The assessment in the hands of assessee was completed making an addition of the non-compete fee of an amount of Rs.75 lakhs. The assessment in the hands of the company was completed disallowing depreciation claimed on the non-compete fee paid as well as the brand equity since the AO was of the view that the assets did not come within the ambit of 'any business or commercial rights of a similar nature’ as did other intangible assets. On appeal, the CIT(A) allowed both the claim of assessee relating to non-compete fee as well as depreciation on brand equity.
On appeal, the HC held that,
Whether remuneration paid to Assessee for loss of business occasioned to him by virtue of non-compete agreement, is not 'restrictive covenant, if agreement allows Assessee to work for others, provided he pays 5% of her earnings to company - YES: HC
++ as far as non compete fee is concerned, it is seen that sole proprietary was succeeded to by the company on Mar 31, 2000. The proprietrix was duly compensated for the assets transferred. Parallelly an agreement was entered into between the parties to provide for a more systematic utilization and exploitation of the creative talents and skills of the Artist. The Artist, who was managing the business as a proprietary concern continued to be part of the corporate structure, employing the same skill sets as always employed by her. It was only the business setting that was enlarged over the relevant period. Though exclusivity of engagement with the company is sought to be portrayed post execution of the non-compete, her services are still available to third parties, subject to consent by, and receipt of 5% of the income therefrom by the company. Though the counsel would point out that the latter has been occasioned only once, in the case of Oscar Films, the very presence of such a clause in the agreement would support the conclusion that the arrangement between parties is only a smokescreen. Ms.Radhikaa was, and continues to be, the face of the business and as proprietrix and thereafter, a director with substantial shareholding, she retained a firm hold on the reins of decision making. The transaction of non compete is thus an illusion in the aforesaid facts and circumstances. The finding of the AO is that the individual artiste continued to be in control of the affairs of the business both prior to and after the date of agreement entered into in March 2000. There is no dispute with regard to the position that while Ms.Radhikaa held more than 99.99% of the shares as on 2.4.2000, the percentage of shareholding before and after the public issue in February 2003 was 68.37 % and 51.33 % respectively;
++ the argument of the counsel for assessee is to the effect that the agreements executed in march and april 2003 should be viewed as part of a sequence of events and not in isolation. He would urge that the payment of non-compete fee was, but one factor in a composite business arrangement designed to elevate the business from a small proprietorship to a company and this resulted in sterilization of a source of income. Despite our best efforts, we are at a loss to visualize this scheme in the sequence of events presented. The company went public three years after the date of agreement between the parties and this factor would hardly come to the aid of the assessee. The period between 2000, when the agreements were executed and 2003 when the company went public, have not seen seen any momentous developments along the lines of what the counsel for assessee has indicated. We thus conclude that the agreements entered into in March and April 2000 are stand alone incidents and not part of a design or scheme of business organization as projected, persuading us to take a conclusion different than what we have indicated above. As such, the agreement would have to be interpreted solely on its own strength. The counsel for Assessee relied upon the judgement of the Supreme Court in the matter of Vodafone International Holdings B V Vs. Union of India - 2012-TII-01-SC-LB-INTL and the decision of the Madras High Court in Commissioner of Income Tax Vs. High Energy Batteries (India) Limited for the proposition that in order to ascertain the legal nature of a transaction, one has to look at the entire transaction as a whole and cannot adopt a dissecting approach. In this context, the Supreme Court cautioned that the transaction should be 'looked at' and not 'looked through'. The burden on the assessee to establish that the transaction is bonafide and genuine has not been discharged, particularly in the light of the admitted facts set out by the AO relating to the continued control exercised by the assessee in the business. Therefore, the substantial question is answered in favour of the Revenue;
Whether brand equity constitutes an intangible asset in terms of Section 32(1)(ii) of I-T Act upon which depreciation is liable to be granted - YES: HC
++ as far as depreciation on brand eyquity is concerned, it is seen that Section 32(1)(ii) of the Act that defines intangible assets as "(ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998, which was owned, wholly or partly, by the assessee and used for the purposes of the business or profession, the deductions shall be allowed." The counsel for the Department fairly admitted that the brand equity of a sum of Rs.75 lakhs valued at a sum of Rs.75 lakhs would be an intangible right coming within the purview of 'business or commercial rights' of a similar nature. He also brought to our notice the decision of this High Court in the case of Penta Media Graphics and Delhi High Court in the case of Sharp Business Systems Vs. Commissioner of Income Tax, that support the stand of the assessee. The substantial questions of law are thus decided in favour of the assessee holding that brand equity constitutes an intangible asset in terms of Section 32(1)(ii) of the Act upon which depreciation is liable to be granted.
Revenue's appeal partly allowed
2017-TIOL-1613-HC-DEL-IT
JAGDISH PRASAD GUPTA Vs CIT: DELHI HIGH COURT (Dated: August 18, 2017)
Income Tax - Sections 10(1), 10(2)(XV), 143(3), 147 & 148.
Keywords - Accrued liability - Contingent liability - licence fee - Right to use - Reassessment & Reason to believe.
The assessee is the sole proprietor of M/s Pradip Oil Corporation. Under agreements with the Northern Railways, between 1975 to 1978, the assessee obtained right to use a piece of Railway land. The assessee declared the income from storage and handling of petroleum products as business income. The assessee also constructed various structures for maintaining the depot. The warehouses were not optimally put to use by the assessee and were rented out to others. This was reflected in the returns as income from house property from the AY 1984-85 onwards. Subsequently in 1980, the Northern Railway revised the licence fee. Likewise, the licence fee was further revised twice. On 23rd March 1988, the Northern Railway further enhanced the licence fee but the same was terminated by the Northern Railway on the ground that the Assessee had failed to deposit the licence fees. It directed the Assessee to remove the unauthorised structure erected on the Railway land and deliver the vacant land to the Assistant Engineer, Northern Railway, Delhi. The letter by the Railways also noted that the outstanding balance up to 31st March, 1986 stood at Rs. 18,11,036/- whilst Rs. 14,14,130/- was due as licence fee for the period from 1st April, 1986 to 31st March, 1988. The Railways also claimed damages at Rs. 1822. 80 per sq.m. along with the arrears of license fee, to the tune of Rs. 1,92,63,785. Thereafter, for each of the years from AYs 2002-03 till AY 2008-09 the NR issued letters demanding enhanced license fees and damages. These letters contained a line which stated that payment would be subject to the decision in the case pending before the EO.
As and when the licence fee was enhanced, the deduction was claimed by the Assessee on such enhanced amount and was allowed by the AO continuously for AYs 1989-90 to 1994-95. In other words, for these AYs a sum of Rs. 13,32,286/- p.a. was allowed as deduction on account of enhanced licence fee. In three of the AYs i.e. AYs 1989-90, 1990-91 and 1993-94, the deduction was allowed after scrutiny under Section 143 (3) of the Act. For AYs 1995-96 to 1999-2000, the Assessee claimed deduction of Rs. 35,37,300/-p.a. as licence fee. In fact, for AY 1995-96 the Assessee also claimed, as a deduction, arrears of Rs. 1,63,83,337/- for the period from 1st April, 1984 to 31st March, 1994 after reducing the amount already claimed in those years. The AO, however, allowed the claim only the extent of Rs. 20,78,600/-.
The CIT(A), for AY 1995-96, allowed Rs. 14,58,497/- as licence fee and the arrears of Rs. 1,63,83,337/-. In a further appeal by the Assessee, the ITAT by order dated 22nd November 2004, allowed Rs. 14,58,497/- for the AY 1995-96 and directed the arrears to be allowed in the sum of Rs. 95,60,650/- in AYs 1987-88 to 1994-95 and Rs. 68,22,900/- in AY 1996-97. This order of the ITAT, for AY 1995-96, was given appeal effect by the AO by an order dated 22nd August, 2006. As a result, thereof, Rs. 11,95,055/- was allowed to be claimed as arrears for AYs 1987-88 to 1995-96 and Rs. 68,22,900 was allowed for AY 1996-97.
For AYs 1996-97 to 1999-2000, the Assessee continued to claim Rs.35,37,300/- as licence fee. While the AO allowed Rs.1,05,570 being the licence fee actually paid by the Assessee, the CIT (A) allowed the amount as claimed by the Assessee in its entirety. For both AY 2000-01 and 2001-02, the Assessee claimed the enhanced licence fee of Rs.1,92,63,785.
Based on the AO's order for AY 2001-02, the assessment for AY 1997- 98 was reopened under Section 147 of the Act by a notice dated 22nd March 2004. Likewise, the assessments for AYs 1998-99, 1999-2000, 2000-01 and 2002-03 were re-opened under Section 147 of the Act by a notice dated 20th May 2004. By orders dated 30th March 2005 for AY 1997-98 and order dated 30th March 2006 for AYs 1998-99 to 2000-01 and 2002-03, the AO restricted the deduction of the licence fee to Rs.1,05,570. The Assessee's appeals against the aforesaid orders were allowed by the CIT (A) by order dated 12th July 2006 and the deductions towards licence fees as claimed by the Assessee were allowed. The Revenue's consequent appeals for AYs 1997-98 to 2000- 01 and 2002-03 as well as the Revenue's appeal for AY 2001-02 were allowed by the ITAT by a common order dated 22nd July 2008.
On appeal, the High Court held that,
Whether the liability of the Assessee to pay enhanced licence fees as deduction in the year in which the demand was raised but was not paid in that year is to be construed as accrued liability - YES: HC
Whether mere characterisation of such demand as damages would not make it any less accrued liability - YES: HC
++ the Assessee would be justified in claiming the enhanced licence fee as deduction in the year in which such enhancement has accrued even though the Assessee has not paid such enhanced licence fee in that year. This legal proposition is well settled. As already noted the Railways has already filed its claim before the Arbitrator for the arrears of 'licence fees' and 'damages'. As rightly held by the CIT (A), and concurred with by the ITAT, the mere characterisation by the Northern Railway of the amount claimed by it from the Assessee as 'damages' will not, in the context of the present case, make it any less an accrued liability. It is an expenditure incurred by the Assessee corresponding to the income he derives from using the land for the purposes of his business. The Court is also not able to agree that the ITAT made a grievous error, in the order passed by it on 22nd November 2004, regarding the claim for enhanced licence fee as a deduction being allowable not in AY 1995-96 but in AY 1996-97. For all of the above reasons, the Court held that the liability of the Assessee to pay enhanced licence fees for the AYs in question was an accrued liability which arose in the year in which demand was raised;
Whether when the Revenue has accepted the claim of the assessee about the enhanced licence fee as accrued liability in the past, resorting to reassessment based on no fresh tangible materials is not legally sustainable - YES: HC
++ the reopening of the assessments for the AYs under consideration was premised on the failure by the Assessee to bring the EO’s order dated 28th March 2000 to the notice of the AO. Further only on the basis of the AO’s order dated 19th March 2004 for AY 2001-02 it has been inferred that there has been an escapement of income. The fact is that in some of the AYs after the date of the EO’s order, the assessments were completed under Section 143 (3) accepting the claim for enhanced licence fee on the basis of accrued liability. This has been already adverted to earlier in this order. There was therefore no fresh tangible material that came to light for the first time for the AO to form reasons to believe that income had escaped assessment. This Court has, therefore, no hesitation in coming to the conclusion that the assumption of jurisdiction under Section 147 seeking to reopen the assessment for the AYs under consideration was not legally sustainable.
Assessee's appeal allowed
2017-TIOL-1602-HC-DEL-CUS
MANVI EXIM PVT LTD Vs PR CC: DELHI HIGH COURT (Dated: July 27, 2017)
Cus - an adverse O-i-O was passed against the petitioner-assessee, based upon an SCN which was allegedly not received by the petitioner - Hence the petitioner filed the present writ in challenge thereof.
Held - Records show that three notices were sent to the petitioner, by speed post, during adjudication - Although the department has the postal receipts, it does not have tracking reports to prove whether or not the notices were actually delivered to the petitioner - In the present case, the SCN was dispatched by ordinary post and not by the registered post, whereas Section 153(a) of the Customs Act mandates despatch of notice by the latter method - Since, the department failed to prove that it satisfied the mandate of Section 153(a), the petitioner gets benefit of doubt - Hence, impugned O-i-O set aside and matter remanded back for de novo adjudication and order - Fresh SCN be provided to petitioner: High Court (Para 1,4,6,7)
Writ petition allowed
2017-TIOL-1601-HC-DEL-ST
NEW GROW SOFTWARE SOLUTIONS PVT LTD Vs UoI: DELHI HIGH COURT (Dated: August 4, 2017)
Appellant Rep. by: Mr Amit Anand Tiwari, Ms Vishakha, Adv
Respondent Rep. by: Mr Nawal Kishore Jha, Adv for UOI with Mr Rajendra Prasad, (S.O.) MOR
ST - petitioner-assessee submitted a bid for providing data entry operators and peons & was later given contract - Under the contract, the petitioner was responsible for complying with all statutory requirements and payment of all statutory dues such as EPF, ESI and service tax - Although the petitioner regularly discharged the service tax liability, it was delayed in depositing EPF - On a later date, even these dues were finally discharged - Prior to such date, the respondent issued a letter, seeking details of all payments made and directed that pending dues be paid - Failure to do so would amount to violation of labour laws & Service Tax Rules - Subsequently, the respondent issued an order debarring the petitioner from participating in tender process or entering into contracts/sub-contracts, for three years - Petitioner challenges such order.
Held - It must first be determined whether or not the petitioner had been served an SCN - Perusing the letter issued by the respondent, it emerges that no mention of blacklisting was made anywhere in it - It is inferred from the same, that the petitioner firm was unaware of the blacklisting action being contemplated against it - Needless to say, blacklisting a firm has serious consequences, with the Apex Court describing it as 'civil death', in its decision in Gorkha Security Services - In the same judgment, the Court also held that just issuing an SCN was not sufficient and the party against whom blacklisting was being contemplated, had to be notified first - Moreover, in its decision Erusian Equipment & Chemicals Ltd, the Apex Court held that no blacklisting could be effected without issue of an SCN, and in Kulja Industries Ltd., the Apex Court laid down several parameters to be followed before blacklisting a firm - Further, in M/s Avinash EM Projects Private Ltd., the Apex Court held that the question of proportionality had to be considered when mulling the blacklisting of a firm - Presently, since no SCN was issued, the impugned order is unsustainable: High Court (Para 1-7,10-16)
Writ petition allowed
2017-TIOL-1600-HC-DEL-ST
CJ INTERNATIONAL HOTELS LTD Vs ACST: DELHI HIGH COURT (Dated: August 17, 2017)
Appellant Rep. by: Mr. J. K. Mittal and Mr. Rajveer Singh, Adv
Respondent Rep. by: Mr. Sanjeev Narula, Senior Standing Counsel and Mr. Abhishek Ghai, Adv for Revenue. Ms. Divya Kapoor, Adv
ST - the petitioner-assessee had paid an amount of service tax although it was not payable - Later the petitioner filed a claim for refund of service tax, which did not reach any conclusion for a very long time - The present petition is the third round of litigation, triggered by the rejection of the refund claim by the Adjudicating authority - Such order of rejection was upheld by the Commr.(A).
Held - Although the grounds concerning the rejection of the petitioner's refund claim by the Adjudicating authority could be challenged before the Tribunal, the petitioner's apprehensions regarding the possibility of the matter getting remanded, and further possible delay in resolution of the issue, were not unfounded - Hence although the present writ was disissed, the Tribunal was directed to hear the appeals filed against the impugned O-i-O & O-i-A, on merits and on grounds of limitation, with the objective of expeditious disposal of the matter: High Court (Para 1-8)
Writ petition dismissed
2017-TIOL-3019-CESTAT-MUM
PRASOL CHEMICALS LTD Vs CCE & C: MUMBAI CESTAT (Dated: July 31, 2017)
CX - Admissibility of CENVAT credit on (a) CHA service, (b) credit on the bill which is in old name of the company, (c) credit on debit note, (d) credit on banking service, management service from ISO certified agency and (e) credit on mobile phone which is name of the Chairman of the company - appeal to CESTAT. Held: Place of removal stands extended to the port of export, therefore, all the CHA services received up to the stage of export of goods from the port are admissible input services - As regards the management service/ISO audit, the said services are for audit and ISO certification of the appellant's record which is very important for better credit rating of the company and ultimately helps for sale promotion of the goods, therefore, is admissible input service - As regard the debit note, when the debit note bears all information such as name of the service provider, registration number, description of the service etc. credit is admissible - Telephone service, even though in the name of the director but same is used in the business activity, hence credit is admissible - Appeal allowed: CESTAT [para 4]
Appeal allowed
2017-TIOL-3018-CESTAT-MUM
SMV BEVERAGES Vs CCE: MUMBAI CESTAT (Dated: July 31, 2017)
CX - CENVAT - Credit availed in respect of input services, for which invoices were raised in their branch office or Delhi office, has been denied - appeal to CESTAT. Held : Except for the fact that the invoices were issued on the different address of the appellant's own company and not at the address of the appellant, the receipt and use of the services is not under dispute - It is not the case of the Revenue that same credit was availed at some other location of the appellant - As branches, head office of the appellant belonging to the same company, credit can be availed at any place, the only condition being that same credit should not be taken twice at two different locations, which is not the case here - Impugned order set aside and appeals allowed: CESTAT [para 4]
Appeals allowed
2017-TIOL-3017-CESTAT-MUM
DALIP MALHOTRA Vs CC: MUMBAI CESTAT (Dated: July 21, 2017)
Cus - Penalty u/s 114AA of Customs Act, 1962 - Appellant using IEC of a different concern for importing second hand goods which are restricted by FTP 2009-14 - appeal to CESTAT. Held: Once there is a conscious and deliberate involvement, not only penalty under Section 114AA is imposable but also similar penalty under Section 112(a) of the Customs Act, 1962 is also imposable - Deliberate intention of appellant is proved from the above questionable modus operandi - It is settled principle of law that fraud nullifies every solemn act and such fraud is liable to be dealt with deterrence under law - appeal dismissed: CESTAT [para 2, 3]
Appeal dismissed
