Jurispruden tiol – Friday's cases

By Vijay Kumar

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

Recorded audio / video Compacts discs imported in bulk and packed in jewel boxes with inlay cards - activity of packing does not amount to manufacture – High Court.

Sony Entertainment (India) Pvt. Ltd. was inter alia engaged in the manufacture of pre-recorded audio cassettes. It commenced in April, 1997 the activity of marketing recording compact discs. The appellant imported recorded audio and video discs packed in boxes of 50. After receipt of the material in its factory, it packed each individual disc in transparent plastic cases known as jewel boxes, an inlay card containing the details of the content of the compact disc was also placed in the jewel box. The whole was then shrink wrapped. The appellant thereupon sold such packed compact discs in wholesale.

Income Tax

Income tax - non-resident company having PE in India seeks advance ruling - files return based on ruling - AO hikes percentage of profit on estimate basis - assessee accepts it - penalty - non-filing of appeal itself is no justification for levying penalty u/s 271(1)(c): ITAT

THE provisions relating to penalty under the Income Tax Act are a hugely used or may call it, 'abused' section, notwithstanding the landmark judicial decisions on this issue. This is one Section which is uniformly applied by the Revenue to both - domestic companies as well as MNCs. Although there are multiple sections like 271AA, 271BA and 271G which were inserted specifically to penalise MNCs concealing income or filing false information but it is Sec 271(1)(c) which often steals the thunder even in the cases of MNCs operating through PEs in India.

Customs

ROM - Reasonability of opportunity granted by the Commissioner was assessed and accordingly the matter was remanded for granting one more opportunity of being heard – No mistake rectifiable under Customs Act - CESTAT

The rule of natural justice requires that a “reasonable opportunity” of being heard should be given to an aggrieved party. In our final order, the reasonability of the opportunity granted by the Commissioner was assessed and accordingly he was directed to grant one more opportunity of being heard to the party. We do not think that, in such a view, there is any mistake rectifiable under section 129B(2) of the Act. The application is dismissed.

Happy Sankranti

See our columns Tomorrow for the judgements