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2014-VIL-316-AP|VAT |High Court Cases | 22.10.2014

M/s RAJ KUMAR ENGINEERING PVT LTD Vs THE STATE OF ANDHRA PRADESH: 24.09.2014 - Andhra Pradesh General Sales Tax Act, 1957 - Section 15(4)(a) – Penalty – Failure to pay tax - Expression levy, charge and collection – Discretion to levy penalty – Mandatory provision – HELD - If the assessing authority was of the view that there was a delay in payment of tax he could have imposed penalty for that month is not without merit, the assessing authority cannot be said to have acted illegally, in considering the failure on the part of the petitioner to pay tax for the earlier months, while exercising discretion to impose penalty for belated payment of tax in a subsequent month. The previous conduct of ... [Read more]

M/s RAJ KUMAR ENGINEERING PVT LTD Vs THE STATE OF ANDHRA PRADESH: 24.09.2014 - Andhra Pradesh General Sales Tax Act, 1957 - Section 15(4)(a) – Penalty – Failure to pay tax - Expression levy, charge and collection – Discretion to levy penalty – Mandatory provision – HELD - If the assessing authority was of the view that there was a delay in payment of tax he could have imposed penalty for that month is not without merit, the assessing authority cannot be said to have acted illegally, in considering the failure on the part of the petitioner to pay tax for the earlier months, while exercising discretion to impose penalty for belated payment of tax in a subsequent month. The previous conduct of the dealer is not an irrelevant factor in deciding whether or not penalty should be imposed on a dealer. We may not be understood to have held that in all cases where penalty is imposed, the previous conduct of the dealer should be taken into consideration. All that we have held is that the authority cannot be said to have acted illegally if, while exercising his discretion to impose penalty, he has taken the previous defaults of the dealer, in making belated payment of tax to the State, into consideration - Section 16(3) of the A.P.G.S.T. Act requires the dealer to pay interest, at the stipulated rate, for belated payment of tax, penalty or any other amount due under the Act. Interest is levied for the period of the delay. The very fact that interest is also levied for belated payment of the penalty amount, goes to show that levy of interest is not in substitution of the penalty which can be imposed under Section 15(4) of the Act. The petitioners contention that, as interest is leviable under Section 16(3) of the Act, penalty should not be imposed under Section 15(4)(a) of the Act is, therefore, not tenable – Assessee appeal dismissed

2014-VIL-317-DEL|VAT |High Court Cases | 22.10.2014

M/s SHUBHAM MARKETING Vs COMMISSIONER VALUE ADDED TAX: 14.10.2014 - Delhi Value Added Tax Act, 2004 – Section 86 - Penalty for non-filing of stock statement online in form Stock-I - Power or jurisdiction to impose fine as a punishment under the provisions of Section 70(5) of the Act - Expressions ‘fine’ and ‘penalty’ – Whether the Commissioner has the power or jurisdiction to impose fine as a punishment under the provisions of Section 70(5) of the said Act through his delegate or such power to impose fine vests with the courts of criminal jurisdiction – HELD - The fine imposed under section 70(5) of the said act is for an “offence” as defined under Section 3(38) of the General Clauses Act, 1... [Read more]

M/s SHUBHAM MARKETING Vs COMMISSIONER VALUE ADDED TAX: 14.10.2014 - Delhi Value Added Tax Act, 2004 – Section 86 - Penalty for non-filing of stock statement online in form Stock-I - Power or jurisdiction to impose fine as a punishment under the provisions of Section 70(5) of the Act - Expressions ‘fine’ and ‘penalty’ – Whether the Commissioner has the power or jurisdiction to impose fine as a punishment under the provisions of Section 70(5) of the said Act through his delegate or such power to impose fine vests with the courts of criminal jurisdiction – HELD - The fine imposed under section 70(5) of the said act is for an “offence” as defined under Section 3(38) of the General Clauses Act, 1897 which shall be tried by the court of criminal jurisdiction in accordance with section 26(b) of the Code of Criminal Procedure, 1973. The commissioner or its delegates do not have power or jurisdiction to impose such fine - Expressions “fine” and “penalty” are not interchangeable - The impugned notices are liable to be quashed on the ground of jurisdiction alone – Assessee appeal allowed

2014-VIL-249-CESTAT-BLR-ST|SERVICE TAX |CESTAT Cases | 22.10.2014

MICROSOFT INDIA (R&D) PVT LTD Vs CST, BANGALORE-SERVICE TAX: 24.09.2014 - Service Tax - Refund claim under Notification No.5/2006-C.E. NT dated 14.3.2006 in respect of unutilized CENVAT credit balance - Refund claim rejected on the ground that services are provided in India and used in India – Product support services agreement between Global Technical Support Centre (GTSC) in Bangalore and Microsoft Corporation USA’s (MSFT) - HELD - We find that in services agreement, it is clearly provided that ‘territory’ shall mean worldwide. When according to the agreement both the parties have to understand that ‘territory’ means ‘worldwide’ how an inference could be drawn that territory means region o... [Read more]

MICROSOFT INDIA (R&D) PVT LTD Vs CST, BANGALORE-SERVICE TAX: 24.09.2014 - Service Tax - Refund claim under Notification No.5/2006-C.E. NT dated 14.3.2006 in respect of unutilized CENVAT credit balance - Refund claim rejected on the ground that services are provided in India and used in India – Product support services agreement between Global Technical Support Centre (GTSC) in Bangalore and Microsoft Corporation USA’s (MSFT) - HELD - We find that in services agreement, it is clearly provided that ‘territory’ shall mean worldwide. When according to the agreement both the parties have to understand that ‘territory’ means ‘worldwide’ how an inference could be drawn that territory means region of India could not be understood - In any case, as we find that the appellants are providing product support service from India and according to the agreement the product support services shall include standard MSFT product support services for products which are generally made available to end-users in the territory and shall include requests for support originating from within the territory. Products support services shall include phone, email, web based and onsite support for all MSFT products. It cannot be said that services have been used in India. We find that appeal has been rejected on the grounds that are not sustainable and accordingly appeal is allowed

2014-VIL-248-CESTAT-AHM-CE|CENTRAL EXCISE |CESTAT Cases | 22.10.2014

M/s JAI CORPORATION LTD Vs CCE, VAPI: 21.10.2014 - Central Excise - Denial of CENVAT Credit which was availed by the appellant when they purchased the property from M/s Asset Reconstruction Company (India) Ltd – Asset taken over under SAFARESI Act by the bankers and handed over to M/s ARCIL - The findings of the adjudicating authority basically revolves around the provisions of Rule 10 of CENVAT Credit Rules, 2004 for denying the CENVAT Credit on the ground that there was no transferring of the inputs and capital goods to the appellant herein – HELD - Transfer of CENVAT Credit has been provided in said provision in sub-rule (1). On deeper perusal of sub-rule (1), it is very clear that when t... [Read more]

M/s JAI CORPORATION LTD Vs CCE, VAPI: 21.10.2014 - Central Excise - Denial of CENVAT Credit which was availed by the appellant when they purchased the property from M/s Asset Reconstruction Company (India) Ltd – Asset taken over under SAFARESI Act by the bankers and handed over to M/s ARCIL - The findings of the adjudicating authority basically revolves around the provisions of Rule 10 of CENVAT Credit Rules, 2004 for denying the CENVAT Credit on the ground that there was no transferring of the inputs and capital goods to the appellant herein – HELD - Transfer of CENVAT Credit has been provided in said provision in sub-rule (1). On deeper perusal of sub-rule (1), it is very clear that when there is change in ownership or on account of sale, with specific provision for transfer of liability, then the manufacturer shall be allowed to transfer the CENVAT Credit lying unutilized to such transferred/sold factory – Perusal of sale certificate issued by M/s Arcil, it transpires that the entire property of M/s Santogen Spinning Mills was handed over to the appellant with all the encumbrances and liabilities which are known and unknown. It would be correct to record that the appellant herein had procured the assets and liabilities from M/s ARCIL, which would include the credit balance lying in books of account of M/s Santogen Spinning Mills. In our considered view, having accepted the entire assets and liabilities together, the appellant cannot be denied the CENVAT Credit which is lying in balance as unutilized credit in the books of account of M/s Santogen Spinning Mills - Impugned order is incorrect, unsustainable and liable to be set aside – Assessee appeal allowed

2014-VIL-313-KER|VAT |High Court Cases | 21.10.2014

M/s MALABAR LATEX (P) LTD Vs SALES TAX OFFICER, THRISSUR: 20.09.2014 - Kerala General Sales Tax Act - Whether or not there was an exemption available to manufacturers of centrifuged latex and crumb rubber, from the payment of tax payable under the KGST Act, on the purchase turnover of rubber in any form used for the manufacture of centrifuged latex and crumb rubber – HELD - While the power to grant exemption or reduction in rate of tax payable under the Act can be exercised either prospectively or retrospectively, the power of the Government to cancel or vary any Notification issued under Sub Section (3) of Section 10 is one that can be exercised only prospectively - Notification that seeks ... [Read more]

M/s MALABAR LATEX (P) LTD Vs SALES TAX OFFICER, THRISSUR: 20.09.2014 - Kerala General Sales Tax Act - Whether or not there was an exemption available to manufacturers of centrifuged latex and crumb rubber, from the payment of tax payable under the KGST Act, on the purchase turnover of rubber in any form used for the manufacture of centrifuged latex and crumb rubber – HELD - While the power to grant exemption or reduction in rate of tax payable under the Act can be exercised either prospectively or retrospectively, the power of the Government to cancel or vary any Notification issued under Sub Section (3) of Section 10 is one that can be exercised only prospectively - Notification that seeks to deprive assessees of the benefit of an exemption already granted for a prior period cannot be legally sustained for want of any power in the Government to do so in terms of the KGST Act - Revenue cannot rely on SRO 946/07 for the purposes of denying the benefit of exemption in terms of SRO 316/05 to the petitioners for the period from 10.10.2001 to 31.03.2004 - Process of manufacture for the purposes of the Notification granting exemption - There is a process of manufacture involved in the conversion of field latex to centrifuged latex and crumb rubber, it cannot be the stand of the department that there is no manufacturing process involved in such a conversion – Assessee petition allowed

2014-VIL-315-P&H|VAT |High Court Cases | 21.10.2014

M/s SHRI RAM ENTERPRISES Vs STATE OF HARYANA: 19.09.2014 - Haryana Value Added Tax Act, 2003 – Classification of HDPE/PP Woven Fabric – Expression ‘Textile’ & ‘Artificial Silk’ – HELD - HDPE woven fabric falls within entry 51 of Schedule B of the Act and is exempted from payment of tax – Appeal allowed

2014-VIL-246-CESTAT-BLR-ST|SERVICE TAX |CESTAT Cases | 21.10.2014

M/s S.R. ENTERPRISES Vs CCE & ST, HYDERABAD-I: 24.09.2014 - Limitation – Appeal beyond the period of limitation for filing and beyond the period of condonation of delay - When an appeal is filed before a wrong authority, whether that can be taken as the date of filing appeal even if appeal was received by proper appellate authority subsequently – HELD - Because of the peculiar circumstances in this case, it would be appropriate not to deny opportunity to the appellant in this case and accordingly, the date of filing appeal before Commercial Tax officer has to be taken as the date on which appeal was filed. Since the date of filing appeal before Commercial Tax officer is within the period of ... [Read more]

M/s S.R. ENTERPRISES Vs CCE & ST, HYDERABAD-I: 24.09.2014 - Limitation – Appeal beyond the period of limitation for filing and beyond the period of condonation of delay - When an appeal is filed before a wrong authority, whether that can be taken as the date of filing appeal even if appeal was received by proper appellate authority subsequently – HELD - Because of the peculiar circumstances in this case, it would be appropriate not to deny opportunity to the appellant in this case and accordingly, the date of filing appeal before Commercial Tax officer has to be taken as the date on which appeal was filed. Since the date of filing appeal before Commercial Tax officer is within the period of limitation, appeal could not have been rejected on the ground that the same has been filed beyond the period of condonation. Accordingly, the impugned order is set aside and the matter is remanded to the Commissioner for fresh consideration in accordance with law accepted for decision relating to date of filing the appeal – It has to be noted that even Commercial Tax officer did not bother to take any action and did not bother to look into the papers. If they were to do so properly, the appeal papers would have been returned to the appellant or would have been forwarded to the proper authority. This aspect also has to be taken into account. The Govt. office also has to take action on the papers received and no action was taken on the papers received from a citizen of the country. We cannot simply deny a citizen’s appellate right just because they filed appeal with a wrong authority - Appeal allowed

2014-VIL-247-CESTAT-DEL-ST|SERVICE TAX |CESTAT Cases | 21.10.2014

M/s VADEHRA BUILDERS PVT LTD Vs CST, NEW DELHI: 15.10.2014 - Service Tax - Works contract - Benefit of Notification No. 15/2004-ST dated 10.09.2004 and exemption Notification No. 12/2003-ST – Abetment – HELD - Benefit of exemption Notification No. 12/2003-ST cannot be granted merely on the basis of overall estimation/approximations put forth and without any documentary proof specifically indicating the value of goods and materials sold in respect of the individual recipients of service as per the contracts entered into by the appellants with each of them. They have failed to produce such documentary proof so far. The appellants insist that they have such documentary proof and would be able t... [Read more]

M/s VADEHRA BUILDERS PVT LTD Vs CST, NEW DELHI: 15.10.2014 - Service Tax - Works contract - Benefit of Notification No. 15/2004-ST dated 10.09.2004 and exemption Notification No. 12/2003-ST – Abetment – HELD - Benefit of exemption Notification No. 12/2003-ST cannot be granted merely on the basis of overall estimation/approximations put forth and without any documentary proof specifically indicating the value of goods and materials sold in respect of the individual recipients of service as per the contracts entered into by the appellants with each of them. They have failed to produce such documentary proof so far. The appellants insist that they have such documentary proof and would be able to produce the same – Matter is remanded to the adjudicating authority to enable the appellants to do so - Suppression of facts - The fact that the appellants did not inform the department that they were claiming exemption under Notification No. 15/2004-ST and Notification No. 1/2006-ST in respect of completion and finishing services coupled with the fact that they so brazenly and blatantly indulged in claiming the benefit under the said notifications in spite of the fact that the said notifications were so expressly, conspicuously and unambiguously not applicable for the said services establishes suppression of facts on their part unquestionably at least on the basis of preponderance of probability. Though that this doesn’t debar them from staking a claim for the benefit of Notification No. 12/2003-ST provided the conditions stipulated thereunder are fully satisfied in the manner prescribed – Impugned order is set aside and matter remanded for de novo adjudicating for the purpose of enabling the appellants to put forth their claim alongwith documentary evidence required for the benefit of Notification No. 12/2003-ST. The adjudicating authority will consider the appellants submissions afresh with regard to the admissibility of the benefit of Notification No. 12/2003-ST and re-determine the demand of service tax and penalties after recording the findings with regard to the extent, if any, to which the benefit of the said Notification No. 12/2003-ST is admissible

2014-VIL-314-GUJ-CE|CENTRAL EXCISE |High Court Cases | 21.10.2014

COMMISSIONER Vs MOTABHAI IRON AND STEEL INDUSTRIES: 03.09.2014 - Central Excise – Demand - Statutory documents – HELD - From the findings recorded by the Tribunal, it is apparent that the sole basis of the demand was the statement of person who did not appear pursuant to the summons issued to him. The assessee was, therefore, deprived of an opportunity to cross examine the witness in respect of the statements made against him. In these circumstances, no reliance can be placed on the statement of such witness who has not subjected himself to cross examination by the affected party, statement lost its efficacy and therefore could not have been used against the assessee – No infirmity in the vi... [Read more]

COMMISSIONER Vs MOTABHAI IRON AND STEEL INDUSTRIES: 03.09.2014 - Central Excise – Demand - Statutory documents – HELD - From the findings recorded by the Tribunal, it is apparent that the sole basis of the demand was the statement of person who did not appear pursuant to the summons issued to him. The assessee was, therefore, deprived of an opportunity to cross examine the witness in respect of the statements made against him. In these circumstances, no reliance can be placed on the statement of such witness who has not subjected himself to cross examination by the affected party, statement lost its efficacy and therefore could not have been used against the assessee – No infirmity in the view taken by the Tribunal while deleting the disallowance of credit - Demands based upon the statements of transporters or drivers of the trucks which were not corroborated by any evidence. Under the circumstances, the Tribunal was justified in holding that only on the basis of third party statements, such demand cannot be made - On the basis of statements of some transporters which were not corroborated by any material on record, a huge credit could not be disallowed - Tribunal order upheld – Revenue appeal dismissed