Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Duty and interest paid before issuance of Show Cause notice – if appellant pays penalty within thirty days of CESTAT order, then amount payable would be only 25% of duty amount – CESTAT.

THE purpose of the Section and the proviso is to give a benefit to the assessee if he pays the duty demanded within 30 days of the adjudication order. In that event, the assessee would be liable to pay only 25% of the duty amount by way of penalty; otherwise he would be liable to pay 100% of the duty amount. In the present case also, it is an admitted fact by the appellant that they have short paid the duty and on pointing out by the Department they admitted their fault and paid the duty demand, hence the appellant is liable to pay the penalty @100% of the duty. But, if the appellant pays the penalty within 30 days of the receipt of this order, then the appellant would be liable to pay only 25% of duty amount as penalty, as the appellant has already reversed the CENVAT credit availed and paid the interest thereon before issuance of show cause notice.

Income Tax

Income by way of maintenance charges, club subscription, electricity charges, Misc. income, refund charges, transfer charges and interest on FDRs; by no stretch of imagination can be treated to have been derived from business of developing and building housing projects. – not eligible for deduction under section 80-IB - ITAT

ON perusal of sub-section (5) of section 80-IA it is seen that it provides for the manner of computation of profits of an eligible business. As per provisions of 80-IA(5) of the Act the profits are to be computed as if such eligible business is the only source of income of the assessee. The assessee had earned income by way of maintenance charges, club subscription, electricity charges, Misc. income, refund charges, transfer charges and interest on FDRs. The income received under these heads by no stretch of imagination can be treated to have been derived from the business of developing and building housing projects approved by the local authority.

Customs

Gold chain with 12 diamonds worth Rs.1.20 Crores mounted on a gold pendant – whether personal effect – When Delta Airlines flight from New York landed at Mumbai International Airport at 22.04 hours, how could panchanama be drawn at 22.00 hours at Exit gate – matter remanded - CESTAT.

ACCORDING to the panchanama dated 7.5.07, the appellant was intercepted at the exit gate of the Arrival Terminal of the International Airport at 10 p.m. on 6.5.07. This interception took place immediately after the appellant passed out of the Green Channel. The appellant produced a letter from the same Airlines to the effect that the flight actually landed at 22.04 hours (10.04 p.m.) The question arises as to how, if the evidence adduced by the party has to be believed, the appellant came to be intercepted at the exit gate of the Arrival Terminal at 10 p.m. This question of fact has been clearly raised in this case. Purportedly, to have this issue settled in his favour, the appellant proposed to cross-examine all the parties to the panchanama proceedings including officers of Customs and panch witnesses. It appears, certain reasons were stated by him as to why he should be permitted to cross-examine the above persons, in his reply to the show- cause notice.

See our columns Tomorrow for the judgements