Jurisprudentiol – Friday's cases

By Vijay Kumar

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

CENVAT Credit – No Credit on Fuel used for exempted final products – Gujarat High Court's order quashed: Supreme Court

The fuel gates are open – The Apex Court has now held that Credit cannot be allowed on fuel that is used for manufacture of exempted goods.

The short question which arises for determination in this batch of civil appeals is : whether the assessee(s) was required to reverse the CENVAT credit in terms of Rule 6(1) of Cenvat Credit Rules, 2002 on the quantity of LSHS which was used as "fuel" for producing steam and electricity, which, in turn, was used in or in relation to the manufacture of exempted goods, namely, fertilizers, during the disputed period(s).

Income Tax

power project - SEB backs out - project abandoned - assessee reclassifies pre-operative expenses as revenue expenditure - Nature of expenditure is determined at time it is incurred and cannot be altered based on subsequent events: ITAT

DOING business involves multiple risks. And one of the risks, albeit rare, is to abandon a project if it becomes unviable. Once it is abandoned, can the assessee who has claimed pre-operative expenses as capital in nature, reclassify the same as revenue expenditure? This is the gist of dispute in this case. And the verdict has gone against the assessee on two counts - when a business should be treated as commencement of the business and reclassification of expenditure.

Customs

Essar's Rs 36 Crore Customs fraud case involving Customs officers – CBI allowed to reinvestigate case in view of Supreme Court judgement upholding penalty – No double jeopardy in investigation: Gujarat HC

AN offence came to be registered by the Central Bureau of Investigation, Gandhinagar on 29th December, 2000 against one Shri M. K. Bhada , Commissioner of Central Excise and Customs and seven others for the offences punishable under Section 120B read with Section 420 of the Indian Penal Code and Section 13(2) read with Section 13(1 )( d) of the Prevention of Corruption Act, 1988.

See our columns Tomorrow for the judgements