Jurisprudentiol – Friday's cases

By Vijay Kumar

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

CENVAT Credit on capital goods – assessment of the goods at the supplier’s end under Chapter Heading 73.08 cannot be reopened by the recipient of the goods – Credit prima facie not admissible – plea that the credit is admissible as input is also not admissible – CESTAT orders pre-deposit.

The applicant is engaged in providing the service of development, customisation and implementation of computer software and availed credit on capital goods, i.e., FACT - 10 Meter RF Shielded in EMC Chamber. The said equipment was classified under Chapter 73 by the supplier. Since Chapter 73 is not covered under the definition of capital goods, show cause notice was issued to the appellants demanding the credit availed. The demand was confirmed with interest and penalty in adjudication.

Income Tax

Consistency is undoubtedly a sound principle but it cannot be in violation of the express provision of the Act. Valuation fixed by Municipal authorities is quite relevant for the determination of the ALV. When the Assessing Officer, who is both, an adjudicator as well as an investigator, is acting in a quasi judicial capacity, it is his perception which counts and not that of the CIT sitting in revisionary proceedings – ITAT (third Member)

It is expressly provided in sec.23(1) that the ALV of any property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year. However, if the property is let out, then the actual rent received or receivable shall be the ALV if it is in excess of the sum referred to earlier. It is also trite that the valuation fixed by Municipal authorities is quite relevant for the determination of the ALV.

Customs

Failure to provide extension of time for export of garments due to fault of AEPC - Petitioner cannot be made to suffer for fault of AEPC – Balance EMD payable @ 12% interest per annum – High Court

THE petitioner, an exporter of ready made garments, was issued an export license for export of 6000 dresses to USA in the year 1991 and the goods were to be exported from Madras Port. Due to change in fabric from cotton to rayon, the petitioner applied for a grant of extension of time to execute the order after depositing 30% of the amount as bank guarantee with AEPC. An extension was granted till May 10, 1991.

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