TIOL-DDT 2694 · the untouched capture
Rendered as it looked. Links and images are disabled in this view; the file itself is untouched.
<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=23157"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2015_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="300" height="148" hspace="5" border="0" align="right" ></a><font color="#663399" size="3">TIOL-DDT 2694 </font><br> 29 09 2015 <br> Tuesday</strong> </font></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Supreme Court Round Up - Recent Cases </em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#00FFFF" span="span"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Customs - shoddy and slipshod investigation. </em> </font></font> </p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Supreme Court observed, "<em>It appears that the allegations were very serious but no cogent material was collected to substantiate these allegations and that is the result of shoddy and slip shod investigation. In normal course, we would have remitted the case back for further investigation. However, it is a matter of the year 1997 and it seems that such an exercise may be futile. Moreover, we may record at this stage that during these proceedings the respondent herein had paid certain amounts to the Department.</em>" </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Appeal was dismissed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <em>Commissioner of Customs Vs Wings Electronics </em>- <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2OTcw" target="_blank"><strong><em>2015-TIOL-221-SC-CUS</em></strong></a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#00FFFF" span="span"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Customs - No appeal on pure findings of fact .</em></font></font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed, " <em>Only pure findings of facts are recorded in the impugned order dated 03.02.2006 passed by the Customs, Excise & Service Tax Appellate Tribunal, and we are of the opinion that there is no question of law which needs to be determined in the instant appeal </em>." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Assessee's Appeal was allowed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Please see Kedia Overseas Ltd Vs CCE and Customs, Visakhapatnam. -<strong> <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2OTY5" target="_blank">2015-TIOL-220-SC-CUS</a></strong></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#00FFFF" span="span"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Central Excise -suppression when the unit was audited several times? .</em></font></font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed,<em> "The Customs, Excise and Service Tax Appellate Tribunal (hereinafter referred to as 'CESTAT') has held that the demand for the aforesaid period was time barred as the Department had not taken any action for more than five years. It is also found as a matter of fact, that the unit of the respondent was audited during this period several times and there were physical inspections by the Department as well. Therefore, there could not be any case of suppression. We are in agreement with the aforesaid view taken by the CESTAT."</em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Appeal was dismissed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see<em> Commissioner of Central Excise, Bangalore Vs Pragathi Concrete Products (P) Ltd - <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2OTcy" target="_blank"><strong>2015-TIOL-223-SC-CX</strong></a></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#00FFFF" span="span"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Customs - Valuation -consideration paid for the technical know-how. </em></font></font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed, "the technical information which was to be provided by the Japanese company to the respondent was for the manufacture of the contract products by the respondent herein, naturally, after the setting up of the plant. This cost is, thus, incurred after the importation of the goods. The matter is squarely covered by the judgment of the Court in the case of <em>'Commissioner of Customs, Ahmedabad v. M/s.EssarSteel Limited </em>' reported in <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAxNjcx"><strong><em>2015-TIOL-63-SC-CUS</em> </strong></a><strong>.</strong><em>"</em> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Appeal was dismissed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <em>Commissioner of Customs Vs Denso Kirloskar Industries Ltd </em>- <em><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2OTcx" target="_blank"><strong>2015-TIOL-222-SC-CUS</strong></a></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#00FFFF" span="span"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Central Excise - Valuation - Amount paid by the assessee to the buyer is not includible in the assessable value.</em></font></font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The additional consideration which flows directly or indirectly from buyer to the assessee can be added to the price which is charged by the seller from the buyer. On the contrary, in the present case, the royalty, which is treated as additional consideration is paid by the seller to the buyer. The very basis of the show cause notice, in fact, was untenable and when the assessee is paying the royalty to the buyer and that too for using the brand name 'NOVINO' which belongs to the buyer, the question of treating the same as "additional consideration" within the meaning of Rule 5 and adding to the price charged from the LNL for sale of the aforesaid product could not arise. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Assessee's Appeal Allowed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see Lakhanpal Ltd vs <em>Commissioner of Central Excise and Customs, Vadodara </em>-<em><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2OTcz" target="_blank"> <strong>2015-TIOL-224-SC-CX</strong></a></em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#00FFFF" span="span"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Central Excise - Valuation - Related Person- where two companies/firms belong to the same group, then the test of mutuality is established and satisfied. </em></font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court had in <em>Commissioner of Central Excise, Hyderabad v. Detergents India Limited - </em><a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTAxNDMw"><strong><em>2015-TIOL-56-SC-CX </em></strong></a><em> </em> formulated the test in the following manner: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"12. When we come to the definition of "related person" the legislature has used a well-known technique. It first employs the expression "means" and states that persons who are associated with the assessee so that they have a direct or indirect interest in the business of each other would get covered. The definition then goes on to use the expression "and includes" thereby indicating that the legislature intends to extend the definition to also include various persons that would not otherwise have so been included. These include a holding company, a subsidiary company, a relative and a distributor of the assessee and any sub-distributor of such distributor. The necessity for including holding and subsidiary companies as defined under the Companies Act, 1956 is to lift the corporate veil in order to get to the economic realities of the transaction." </em></font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the present case, the Supreme Court observed, "We are of the opinion that the aforesaid judgment squarely applies to the facts of the present case as it holds that where the two companies/firms etc., belong to the same group then the test of mutuality is established and satisfied. In a sense, the Court has torn the corporate veil thereby pointing out that such family concerns would be beneficiaries in the affairs of each other." </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Appeal Allowed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see Commissioner of Central Excise, Mumbai-V vs <em>J Foundation </em>-<strong> <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2OTA5"><em>2015-TIOL-215-SC-CX </em></a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#00FFFF" span="span"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Commissioner drops the case on limitation - Revenue takes the matter to Supreme Court. </em></font></font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is very rarely that you find a Commissioner dropping a case and that too on limitation. But such legal temerity is not easily tolerated. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Commissioner in his order had observed, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>When all this material was made available to the department and the classification list have been approved and RT -12 returns assessed down the years, it is difficult to find any justification for upholding the allegation of misstatement or suppression of facts. I have to accordingly hold that the proviso to Section 11A cannot be applied to the present case and, therefore, the demand for duty is time barred. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue took the matter right up to the Supreme Court. The Supreme Court did not find any error in the order of the Commissioner on this aspect. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Appeal Dismissed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see Commissioner of Central Excise, Mumbai-III vs <em>EsselPropack Ltd </em>-<strong> <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2OTA2"><em>2015-TIOL-212-SC-CX </em></a></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif" style="background-color:#00FFFF" span="span"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Central Excise - Valuation - jobwork - loan to jobworker has not influenced the price - Pure findings of facts not to be interfered with:</em></font></font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this case also, the Commissioner had dropped the proceedings and the CESTAT found, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Nestle India Ltd. was supplying the raw material. They had given loan for purchase of machinery but it had not influenced the pricing and the assessable value of the goods manufactured by the assessee as an independent job worker. The value of the job worker alone is required to be adopted in terms of the Apex Court judgment rendered in the case of M/s. Pawan Biscuits Ltd. (cited supra) which has followed the earlier judgment of the Apex Court rendered in the case of M/s. Ujagar Prints (cited supra). There is no flow back of funds and the assessee herein does not have interest in M/s. Nestle India Ltd.'s profits. There is no mutuality of interest and the relationship was on principal-to-principal basis. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But Revenue took the matter to the Supreme Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed that these are pure findings of facts after analysing the documents on record and does not call for any interference. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Appeal Dismissed. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see Commissioner of Central Excise, Bangalore vs <em>Campco </em>- <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=MTA2OTA1"><strong><em>2015-TIOL-211-SC-CX</em></strong> </a></font></p> <p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Income Tax Return and Audit report - No Extension of Due Date - Fake Order Circulating </em></strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> has been brought to the notice of the Government that a fake order dated 26th September 2015 supposedly under section 119 of the Income-tax Act 1961 under the signature of one Upmanyu Reddy, Under Secretary to the Government of India is in circulation. The fake order extends the due date for filing of audit report under section 119 of the Income-tax Act to 15 October 2015. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government clarifies that the order is fraudulent.The Government has not extended the due date for filing of returns and audit report due by 30th September 2015. Tax payer and practitioners are advised not to give any credence to the fraudulent order purportedly signed by one Upmanyu Reddy. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A delegation of chartered accountants led by the President of the Institute of Chartered Accountants of India (ICAI) met the Finance Minister on 22.09.2015 and requested him to extend the due date of filing return of income as well as the tax audit report under section 139 of the Income-tax Act, 1961 falling due on 30th September, 2015 to <strong>31st October, 2015. </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Though the Finance Minister has assured to look into the matter, the Institute has advised its members to put in their best efforts to comply with the prescribed due date i.e. 30th September, 2015. </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p> <p align="justify"><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@tiol.in"><strong>vijaywrite@tiol.in</strong></a></font></p> </body> </html>