Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Intermediate goods manufactured on job work basis under Notification 214/86-CE for further consumption in a unit availing area based exemption Notification 50/2003-CE should pass test of marketability for levy of excise duty – Demand of duty and levy of penalty fails on merits as well as limitation – CESTAT

It is a settled law that the burden to prove marketability is always on the revenue and not on the assessee and in the instant case there is no proof adduced by revenue to prove that the extrusions/profiles manufactured by Appellant I were marketable in the condition in which they were removed from their factory. In the absence of any proof of marketability of the goods cleared on job work basis, CESTAT held that the duty liability cannot be fixed on Appellant I.

Income Tax

Executive power of Union extends to matters to exercise of rights by virtue of any treaty or agreement with by virtue of Article 73 (1) (b) of Constitution of India but that is “subject of course to constitutional limitations”.

Mr S.K. Jha, who famously challenged the circular issued by the CBDT to accept certificates of residence issued by the Mauritius authorities as final proof of residence of a taxpayer without any question and won the first round in the Delhi High Court, has done it again! It is common knowledge that the decision of the High Court was overturned by the Supreme Court in the famous Azadi Bachao Andolan case. Thereafter, Mr Jha tried to get the decision reviewed on certain points so that he could file a curative petition. Having failed, he filed a PIL in the Delhi High Court by way of a writ alleging that the powers and authority of the Central Government in entering into treaties are being abused in violation of the Constitution.

Central Excise

Penalty under rule 15 of CER, 2002 is not imposable as there is no such provision – penalty under rule 25 can be imposed where goods are liable for confiscation – being a revenue neutral situation no intention to evade duty – Penalty set aside – CESTAT

The penalty under rule 25 of the Central Excise Rules, 2002 cannot be imposed as the goods were held liable for confiscation. The penalty under Rule 15 of the Cenvat Credit Rules, 2004 read with section 11AC of the Central Excise Act is also not imposable as there was no intention to evade payment of duty in the fact and circumstance of the case.

See our columns Tomorrow for the judgements