Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Goods cleared under claim of rebate – truck meets with an accident and goods brought back to factory – refund of duty paid allowed but Commissioner(A) sets aside order insisting that rule 16 procedure ought to be followed – there cannot be any recovery without a demand u/s 11A of the CEA, 1944 – CESTAT orders stay.

The appellant had cleared a consignment of their final product for export under claim of rebate but the goods could not be exported as the truck which carried the goods was involved in an accident in transit. The goods were brought back to the factory and subsequently an application for refund of the above amount of CENVAT credit was filed. The original authority allowed this claim and the party was permitted to raise credit of equivalent amount in their RG 23A Part II account. This decision was reviewed under section 35E of the Central Excise Act, 1944 and an appeal was filed with the Commissioner(Appeals). The appeal of the department was allowed by the appellate authority on the ground that the party ought to have taken credit of the above amount under Rule 16 of the Central Excise Rules, 2002 rather than filing a refund claim.

Income Tax

The term 'derivatives' in which underlying asset is shares, will fall within meaning of 'commodity' used in Sec. 43(5) of Act - Exempting certain derivatives by Finance Act only prospective: ITAT Spl Bench

In this case, the Legislature made the amendment because of the technological advancement introduced by the stock markets resulting in more transparency in the dealings. Therefore, the circumstances under which amendment was brought into existence do not lead to the inference that it was retrospective.

Customs

Settlement Commission is empowered to order interest even if there was no notice for interest: Bombay HC

The Settlement Commission has all the powers of an officer under the Act. The Applicant approaches the Settlement Commission for the purpose of settlement of the matter which can exercise the power of the Custom Officer. Once there is power under Section 127F, it was open to the Settlement Commission to have directed payment of interest. Ultimately Settlement is of the “case”. The case involves a demand for duty. Once duty is held to be payable, interest becomes payable by operation of law. Only the question has to be ascertained in terms of the Board's Orders. It is, therefore, a part of the ‘case'.

See our columns Tomorrow for the judgements