Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Commissioner ignored a significant provision contained in the proviso to notification 67/95-CE while confirming demand of over Rs 3 crores – issue not addressed seriously – Stay ordered: CESTAT

THE case goes thus - A part of the naphtha manufactured within the refinery was captively consumed in the generation of electricity which in turn was captively consumed in the manufacture of two other petroleum products [viz. LPG (Domestic) and SKO (PDS)] which were cleared without payment of duty. A duty demand of more than three crores was raised on the said quantity of naphtha by denying the benefit of Notification no. 67/95-CE dated 16.03.1995 to the assessee.

Income Tax

Can assessee claim deduction of provision made for fluctuation in foreign exchange earmarked for paying technical knowhow even though no TDS was deducted - YES, says High Court.

THE allowability of fluctuation in foreign exchange rates has always been a major bone of contention between the Revenue and the assessee. In this interesting case, the issue is - Whether the assessee is entitled to claim deduction of provision made on account of foreign exchange fluctuation in relation to technical Know-how even though no TDS was deducted by the assessee, And the answer is YES.

Customs

The Tribunal is expected to bear in mind that judgments of Tribunal are subject to scrutiny by High Courts – Bombay HC quashes a cryptic order by CESTAT (WZB)

THE first paragraph of the order is nothing but a preamble to the order, whereas the second para of the order refers to the findings given by the adjudicating Commissioner, whereas third para takes notice of the definition of word “goods” and finally in fourth para conclusive finding without there being any threadbare discussion is recorded. Such order can hardly be said to be a reasoned order with application of mind.

These are the observations of the HC of Bombay in an appeal by the revenue against the Tribunal's order in 2005-TIOL-708-CESTAT-MUM

See our columns Tomorrow for the judgements