Jurisprudentiol– Tomorrow's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

Demand of CENVAT credit not sustainable when notification specifically provides for exemption subject to non-availment of CENVAT credit on inputs – Revenue ought to demand duty on finished goods and deny exemption benefit for violation of condition: CESTAT

ONCE the goods are exported under bond even if they were not entitled to cenvat credit, the duty paid on the inputs could have been claimed as a refund, therefore, whole exercise is Revenue neutral and availment of cenvat credit can at best be held as procedural irregularity.

Income Tax

Once the mandate of section 271(1)(c) are satisfied, there is no further onus on the Assessing Officer to establish mens rea. The views expressed in Dharmedra Textile Processors' case cannot be viewed as an authority for the proposition that a penalty under section 271(1)(c) is an automatic consequence of an addition being made to income - ITAT

It is thus clear that, in the considered view of Hon'ble Supreme Court, it is no longer necessary that Revenue is required to prove mens rea and, therefore, independent finding about conscious concealment is no longer a condition precedent for imposition of penalty under section 271(1)(c) read with Explanation 1 thereto. The school of thought casting onus on Revenue to prove mens rea, as advocated by large number of judicial precedents relied upon by the assessee, has been thus specifically rejected by the Hon'ble Supreme Court.

Customs

Addition of an amount of 2% of assessable value as cost of 'design and drawing charges' is totally subjective and imaginary and has no legal basis – Revenue appeal rejected - Tribunal

IT is also seen that the price is agreed and contracted between the assessee and their customers. The assessees have not recovered anything over and above the price contracted. There is no allegation regarding flow back of any additional consideration from the customers to the assessee.

See our columns tomorrow for the judgements