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 – Dutiable and exempted goods - where inputs are intended to be used as fuel, assessee would be entitled to avail credit of fuels even though part of it is used to manufacture of exempted final products – High Court

A manufacturer of both dutiable and exempted goods is entitled to avail Cenvat credit on such quantity of inputs which is used in the manufacture of exempted goods except the circumstances mentioned in sub-rule (2), which contemplates that where a manufacturer avails the Cenvat credit in respect of any inputs, except inputs intended to be used as fuel, and manufactures such final products which are chargeable to duty as well as exempted goods then he would be required to maintain separate accounts for receipt, consumption and inventory of inputs meant for use in the manufacture of dutiable final products and the quantity of inputs meant for use in the manufacture of exempted goods and take Cenvat credit only on that quantity of inputs which is intended for use in the manufacture of dutiable goods.

Income Tax

Expenditure incurred by way of sea freight not eligible for weighted deduction in terms of sub-clause (iii) of Section 35B (1)(b) of IT Act, 1961 – Principle in legal maxims Generalia specialibus non derogant and Generalibus specialia derogant followed: HC Larger Bench

THE assessee company, derived income from export and claimed for weighted deduction in respect of sea freight under Section 35B of Income Tax Act, 1961 (‘the Act'). While the assessing officer and the first appellate authority disallowed the claim, the Income Tax Appellate Tribunal following its earlier decision allowed the claim. The earlier decision of the ITAT was affirmed by the Punjab & Haryana High Court in CIT vs. Roadmaster Industries of India (P) Ltd and CIT vs. Indo Asian Switchgears (P) Ltd.

Customs

Mumbai Port Trust being a body corporate governed by Major Port Trusts Act, 1963, not liable to pay customs duties on goods pilfered or lost whilst in custody – Notification issued by Commissioner notifying Port Trust as an approved person ultra vires of Section 45(1) of Customs Act, consequently declared null and void – Bombay High Court

IN a judgment which has far reaching consequences, Mumbai High Court held that the Mumbai Port Trust being a body corporate set up under the Major Port Trusts Act, 1963 is governed by the provisions of that Act and not by the provisions of Customs Act, 1962 in so far as the liability to pay customs duties on lost or pilfered goods held in their custody.

See our columns Tomorrow for the judgements