Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Income tax - Sec 40A(2) - Disallowance cannot be made merely on ground that assessee's sister concern made supplies of improved quality of raw materials: ITAT

THE assessee purchased raw material namely ‘Gardresser-Litex' from M/s. Gargi Chemicals Pvt. Ltd. which is an associate concern within the meaning of section 40A(2)b). Upto 24.7.2004 the assessee paid Rs 21/- per litre for the above material. From 28.7.2004, the price was increased to Rs.25/- per litre. The Assessing Officer noticed that certain other concerns of Nova group who were also buying the material from M/s. Gargi continued to pay Rs.21/- per litre even after 28.7.2004. He therefore took the view that the price of Rs.25/- per litre paid by the assessee was unreasonable and excessive and called for the assessees explanation.

Central Excise

Higher duty paid on export goods calculated on CIF value - Revenue was not right in reducing rebate claim to extent of duty payable on FOB value – re-credit taken of rejected rebate amount - Prima facie applicability of LB decision in BDH Industries is in doubt - Stay granted: CESTAT

THE appellant submitted that the cited decision of the Larger Bench is not applicable to the present case as the decision relied on the requirement of meeting the principles of unjust enrichment, whereas in the case of export no such requirement is necessary. It is further submitted that in the case of Sterlite Industries (I) Ltd. vs. Commissioner of Central Excise, Tirunelveli (2009-TIOL-99-CESTAT-MAD) it has been held that the exporter is entitled to rebate of entire duty of excise paid by it on the clearance of goods for export and this case was decided after the cited decision of the Larger Bench was available.

Customs/Excise/Service Tax

Clandestine removal and duty liability – Failure to provide copies of relied upon documents discloses lack of bonafide on part of Department - Demand cannot be sustained without furnishing copies of relied upon documents and allowing assessee to rebut the same: CESTAT

THIS is an appeal filed by the CCE, Ludhiana against the order passed by the Commissioner (Appeals) wherein the appellate authority dismissed the appeal filed by the Revenue against the non-imposition of penalty by the adjudicating authority and allowed the appeal of the respondent assessee against confirmation of duty demand. The case of the department is that the respondent assessee had clandestinely manufactured and removed the goods without payment of any Central Excise duty.

See our columns Monday for the judgements