Jurisprudentiol–Monday's cases

By Vijay Kumar

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

Exports – Refund of AED(T&TA) on inputs – entitled - a beneficial circular has to be applied retrospectively while oppressive circular has to be applied prospectively – High Court

It must be held that even though the clarification about refund of additional duty of excise (T&TA) was issued on 22.3.2007, it was to be applicable to all the pending cases and therefore, its application cannot be restricted only to future.

Both these circulars clearly show that the Board had seriously considered the provisions of the rules, representations and demands of the trade and industry and had come to conclusion that benefit of refund can be given under the rules.

Income Tax

Cooperative society – trading stock in godown - Commission income not eligible for exemption: SC

TO give a boost to the cooperative movement in the country, Cooperative Societies have always been exempted from the income tax. However, the exemption is conditional and certainly not blanket in its effect. Only that income which is earned from storage, warehousing and facilitation of marketable commodities is exempted. And the relevant Section is Sec 80P(2)(e) of the 1961 Act. Its predecessor Section under the I-T Act, 1922 is Section 14(3)(iv) of the 1922 Act. However, storage of goods as part of trading activities is not exempted and this is what has been confirmed by the Apex Court in the instant decision.

Customs

Redemption Fine – Duty is payable even if the confiscated goods are not redeemed – If benefit is given to another assessee illegally, the Court cannot perpetuate illegality – High Court

The issue really stands concluded considering the Coordinate Bench Judgments of this Court in Commissioner of Customs Vs. Wockhardt Hospital and Heart Institute, reported in 2006-TIOL-115-HC-MUM-CUS and the judgment in Bombay Hospital Trust Versus Commissioner of Customs (ACC) Mumbai 2006-TIOL-170-HC-MUM-CUS. Apart from that, the legislature has made it clear that even if the goods are released on payment of fine, such person is also liable to pay duty and charges thereon. The fine payable to get possession of the goods under section 125 is distinct and different from the duty of goods which are to be imported or exported. It is the nature of recompense to the state for goods which are vested in it and on sale would have realized the value of the goods and from that to recover the duty which is unpaid as also fine.

See our columns Monday for the judgements