Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Export Clearances not to be reckoned for computing aggregate value of clearances under SSI notification : CESTAT

THE department, after scrutiny of records and connected enquiries, issued a show-cause notice on 12.12.2006 under the proviso to section 11A(1) of the Central Excise Act alleging inter alia that the assessee had cleared the specified goods for home consumption in excess of the limit prescribed under the relevant notifications and consequently they are not entitled to claim SSI benefit. It was alleged that the cartons (packing materials) manufactured by the assessee and cleared to exporters without payment of duty were liable to be treated as clearance for home consumption on account of the fact that the goods were not directly exported from the factory of production and, therefore, the provisions of Rule 19(1) were not attracted . It was alleged that such clearances were liable to be treated as ‘clearances for home consumption' and included in the aggregate value of clearances for the purpose of computing the exemption limit under the SSI notification.

Income Tax

Whether, for allowability of expenditure, head of income is to be considered and deduction cannot be allowed under different head merely on basis of nature of income? - Yes, says ITAT

THE issue before the Tribunal is -Whether the allowability of expenditure has to be considered under a particular head of income and the deduction cannot be allowed under different head merely on the basis of nature of income. YES, says the Tribunal.

Central Excise

Job work - Merely because waste and scrap were not returned, CENVAT cannot be denied in its entirety : CESTAT

THE short issue is that the respondent assessee had obtained the requisite permission from the jurisdictional authorities to remove cenvatted inputs from their factory to a job worker and clear the finished products directly from the premises of the job worker on payment of duty. Incidentally, the assessee did not bring back from the job worker the waste and scrap that was generated during the processing of finished goods.

Revenue has taken a view that the ENTIRE credit taken on the inputs is inadmissible and the adjudicating authority denied the credit and confirmed the demand along with interest and penalty.

See our columns Monday for the judgements