Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Provisions under Section 9-D, which are pari materia with provisions under Section 32 of Evidence Act, cannot be held as ultra vires of Constitution: Delhi High Court

IN many cases, it is routine for the revenue officers to raise demands based on a number of statements recorded from various persons and these statements are relied upon in the show cause notices. The assessees in the adjudication proceedings seek cross examination of the witnesses from whom such statements are recorded, which if denied would amount to violation of principles of natural justice.

Income Tax

Sec 40A(2) - assessee offers higher trade discount - AO finds it excessive and disallows it - Since giving trade discount is not an expenditure incurred, question of applicability of Sec 40A(2) does not arise: Delhi High Court

THERE are certain Sections in the I-T Act which are only for making disallowances. One of them is Sec 40A(2). But the larger question here in this dispute is whether it applies to trade discounts offered by the assessee? And the answer is that it does not apply to trading discount as it is applicable only in a case where a sum is actually spent by the assessee as an expenditure.

Customs

Over-invoicing of exports for higher DEPB claim - Allegation based on comparative domestic prices not sustainable – Confessional statements recorded under continued threat of arrest and freezing of bank accounts have no evidentiary value - No authority under Customs Act to recover excess DEPB when exporter had not utilized DEPB scrips for duty free imports: CESTAT

THE appellants were alleged to have exported articles of non alloy steel by over invoicing them for claim of excess DEPB. The DEPB scrips were subsequently sold. Directorate of Revenue Intelligence initiated investigation against the appellants. Samples were obtained from the goods lying in ICD for export and they were found to be of non alloy steel only. Confessional statements were recorded from the partners under s. 108 of Customs Act, 1962. A show cause notice was issued to the appellants, their partners and the firms which purchased DEPB. A demand of Rs. 47 lakhs alleged to be the excess DEPB claim was confirmed. Penalties were imposed on the firms and the individuals. Goods meant for export and goods already exported were held liable for confiscation.

See our columns Tomorrow for the judgements