Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Manufacture – fabrics - carding, knitting and shearing, not amounting to manufacture – Supreme Court

DIFFICULT to hold that the processes of shearing or back-coating are of the same nature as other processes mentioned in the said chapter Note and therefore, would fall within the scope and ambit of "any other process. A bare perusal of the nature of the processes, explained in the said declaration reveals that the processes mentioned therein do not have the effect of changing the "grey fabric" into another commodity or bring about a permanent or lasting change in the fabric so as to bring out a new product, tantamounting to manufacture in terms of Chapter Note 4 to Chapter 60 of the Tariff Act.

Fresh plea, not raised in the Show Cause Notice cannot be allowed: it is trite law that unless the foundation of the case is laid in the show cause notice, the revenue cannot be permitted to build up a new case against the assessee. Revenue cannot be allowed to raise a fresh plea, which has not been raised in the Show Cause notice nor can it be allowed to take contradictory stands in relation to the same assessee.

WB Sales Tax

Depreciation not to be reduced for calculating 'Investment'; Exemption Notification:

IN computing the valuation of plant and machinery, only the cost price/purchase price of the equipment invested by the assessee will have to be taken into account. The expression "investment" in plant and machinery is not subject to the impact of depreciation in the value of plant and machinery.

Liberal construction not required when the notification is not applicable;

The principle to be kept in view while interpreting exemption notification is that the meaning of the words given in the exemption notification is to be gathered from the language employed in the notification. There is no requirement of liberal construction as the notification does not apply to the assessee in the first place.

Interest liable to be paid on d efault of tax:

Where the tax due on the basis of quarterly return is not paid before the expiry of the last date of filing of such return under the Act, it is not necessary to issue any notice of demand but on the default being committed by the dealer, he becomes liable to pay interest

Customs

HAPPY end to SAD refund on Timber imports? – judicial precedents would prevail over circulars issued by Board - CESTAT

REFUND of additional duty of customs paid under Section 3(5) of the Customs Tariff Act, 1975 has been in news for the wrong reasons. There were reports of outsourcing the refund work by the department. There is even a modus operandi circular by the CBEC on the alleged fraudulent claims of 4% Additional duty by some unscrupulous importers. Whatever may be the reasons for such outsourcing or alert circulars, at least it appears the refunds are admissible on merits. That is what the CESTAT has held about the refund claims filed on the Timber imported from Kandla Port.

See our columns tomorrow for the judgements