Jurisprudentiol – Tuesday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Income Tax

Income tax - Deduction under Sec 10A to be allowed only after setting off brought forward losses; Perpetuating a mistake is not heroism, says Tribunal

SECTION 10A is indeed one of the most disputed Sections in the I-T Act. When the Chennai Special Bench had given its decision in favour of the assessee in the case of Scientific Atlanta, it was thought that the issue has been settled. But that is not correct. In an interesting and bold decision, the Bangalore Bench of the Tribunal has differed with the Special Bench by observing that the perpetuating a mistake is not heroism and has finally gone by the decision of the Jurisdictional High Court which has ruled in favour of the Revenue.

Central Excise

Penalty under Rule 25 not applicable to purchaser of excisable goods: High Court

THE assessee is a 100% EOU engaged in manufacture of ready made garments. The DRI, in the course of investigation, found that the assessee had issued CT-3 certificates for procurement of 100% polyester hand print fabrics measuring 3.75 lakh mts from another EOU, but were alleged to have been diverted to the local market in collusion with the supplier by fabricating AR3A documents. A SCN was issued to the assessee which was adjudicated by the Commissioner whereby a penalty of Rs. 10 lakhs each was imposed both on the assessee and its director. An appeal to the CESTAT resulted in quashing of penalties.

Customs

Adjudicating authority could not have by a visual examination arrived at a conclusion that the ‘Hard Disc Drive” imported is a ‘removable/exchangeable' – Commissioner(A) relying on expert opinion to uphold classification as claimed by importer appears proper – No cause for granting any stay – Revenue appeal rejected: CESTAT

THE respondent imported goods declared as “Hard Disc Drives” and classified the same under CTH 8471 70 20. The department alleged that what was imported is “Removable or exchangeable disc drives” and the same is correctly classifiable under CTH 8471 70 30. The original adjudicating authority was of the view that such issues could be decided by a simple visual examination. He placed the “alleged hard disc drive” on the adjudication table and observed in his order that the hard disc imported by the appellant are enclosed in metal cartridges by fitting and these were interchangeable. So, he upheld the department's stand.

See our columns Tuesday for the judgements