Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Adjudication Order passed by Chief Commissioner is appealable to CESTAT; An officer can exercise powers of only his immediate subordinate - CC can exercise power of a Commissioner, not an AC – High Court

THE mere fact that the Chief Commissioner of Customs has signed the original order of adjudication as Chief Commissioner of Customs cannot make the said order as the one passed by the Chief Commissioner of Customs in its own capacity. But the same has to be construed as the one passed by the Commissioner (Adjudication). In other words, the Chief Commissioner of Customs has stepped into the shoes of the Commissioner of Customs and exercised his power as an adjudicating authority in this case. He has got no independent power of adjudication except to take the power of the Commissioner (Adjudication) under Section 5(2) of the Act.

Income Tax

Revenue vs Capital Expenditure - complete purchase of existing business with plant and machinery - non-compete fee paid - it is capital in nature: ITAT Special Bench

THE issue before the Special Bench of the ITAT is - Whether the assessee by entering into a non-compete agreement, has acquired any benefit of enduring nature which can be treated as capital expenditure. Whether the non-compete amount should be considered separately from what was paid by the assessee to acquire the business activity of transformers and its related facilities from Whirlpool India Ltd .

Central Excise

Imposing penalty on appellant without quoting provisions of law is illegal: CESTAT

ENTHUSIASM knows no bounds and who can vouch more than the Department.

The present case is a critical example of the same. The facts are that the appellants had supplied excisable goods on payment of duty to Railways and during warranty period the defective goods were received back for repairs in which the appellants had used inputs on which Cenvat credit was taken. It was alleged that the appellants had not reversed the Cenvat credit of Rs.72,360/- on the inputs used in repairs of defective goods during the warranty period.

The appellants submitted that in terms of the agreement entered into by them with the Railways, they were bound to replace the components free of cost during the warranty period. Inasmuch as since the original price charged to Railways had already included the cost of repairs with material during warranty period and on which duty had already been paid, they were not in the wrong. However, to buy peace, they paid the Cenvat credit availed before issue of show cause notice.

See our columns tomorrow for the judgements