Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Any fact necessary to support the legal plea should be raised at time of filing reply to the show cause notice - Without this support of fact, legal plea has no leg to stand on - Plea of limitation raised before Tribunal for first time which involves mixed questions of fact and law, cannot be entertained – CESTAT

THE original adjudicating authority confirmed the demand of Rs.2.49 lakhs issued for denial of MODVAT credit and imposed a penalty of Rs.20,000/-. The assessee subsequently paid this amount Under Protest through the PLA account and went in appeal. The Commissioner(A) set aside the order of the lower authority and the assessee suo motu took credit of the amount paid by them of Rs.2.49 lakhs. This was objected by the jurisdictional authorities and the demand was confirmed along with imposition of penalty. In appeal, the first appellate authority held against the party in respect of 'suo motu MODVAT credit' but vacated the penalty. So, the assessee went in appeal to the CESTAT.

Income Tax

Depreciation is allowable on entire block even if some of the assets of block have not been used - It is duty of everyone who has anything to do with taxing business-people to understand what principles of commercial expediency are. ITAT

THE sole ground raised in the appeal is in respect of disallowance of proportionate depreciation of Rs. 7,27,249/- on account of closure of one unit out of two units of the assessee. The assessee was carrying on two businesses having one division at Dombivili and the other at Surat. Division at Surat was meant for yarn texturising in the name and style of M/s Swati Polyester and division at Dombivilli carried on the business of dyeing by the name of Swati Dyeing. The division of Surat had been closed since two/three years. The AO noticed that the assessee had claimed depreciation on the assets of Surat Division, which was closed. He disallowed the claim of depreciation of the assessee and the same has been confirmed by the CIT(A) observing that the assets were not used during the relevant accounting year as the Division at Surat was closed.

Customs

Appellant is an employee of CHA firm and was merely doing documentation work as per instructions received – since CHA has not been imposed any penalty, no cause for imposition of penalty on employee –CESTAT

THE lower authority has not imposed any penalty on the CHA firm, where the appellant was mere an employee, who was working under the instruction of the CHA firm. In the absence of any knowledge and holding that penal action cannot be taken against the CHA firm, penalty against the appellant is also not sustainable.

See our columns Monday for the judgements