Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Theoretical shortage of inputs – CENVAT credit liable to be reversed – As Penalty u/s 11AC of CEA, 1944 is upheld submission of limitation considered - No error apparent on record - ROM application rejected: CESTAT

THE appellant has filed the present Rectification of Mistake Application against the said order on the ground that while passing the order the Bench had failed to consider the submission made by the appellants with regards to invocation of extended period. The Revenue representative submitted that as the Bench had confirmed the penalty on the appellants under section 11AC, it implies that while passing the order, the Tribunal has considered the facts of mis-statement/suppression by the appellants.

Income Tax

An expenditure incurred for securing shares per se is a 'capital expenditure' and never Revenue expenditure'; Same court judgement in same assessee's case not followed, per incuriam; interest receivable but not received is income; Fee for consultant is revenue expenditure – deductable – Tribunal's conclusion perverse: High Court

EVEN on the accepted legal principles, a 'debt' is an expression well known in legal parlance and is an amount which is a legal obligation which if not discharged will give rise to a claim in favour of the creditor. An expenditure in the nature of 'capital expenditure' straight away goes out of the purview of section 37 of the Act unless the amount fully qualifies in terms of the other statutory provisions and in the instant case, in terms of section 36[1][vii] of the Act, there is no question of 'written off irrecoverable debts' which claim inevitably fails and the matter does not warrant interference even for a remand.

Sales Tax

Loan transaction of imported crude among PSU oil Companies - simple barter or loan; not sale: High Court

IN case the oil refinery situated in the State of Tamil Nadu delivered crude oil by repayment of loan to another oil Company situated in another State by shipment, even then it was not a sale and by no stretch of imagination, it could be treated as a sale in the State of Tamil Nadu. When the oil refinery at Chennai receives crude oil after this particular discharge at ports in other States, still there would be no purchase by the refinery situated in Tamil Nadu under the Tamil Nadu General Sales Tax Act, 1959.

See our columns Tomorrow for the judgements