Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Valuation - Cost of freight between the factory to the Depot of related person to be included; Penalty - when no fraud or suppression is alleged in the show cause notice, the imposition of penalty is wholly impermissible : Supreme Court

THE implication of the manufacturer, the assessee and the buyer being related to each other was that the price charged to the related person was presumed to be understated and to dissuade such sales, the legislature had introduced the said proviso as anti-evasion measure. Hence, to give deductions to the assessee as claimed, would defeat the very object of the third proviso.

It is well settled that when the statutes create an offence and an ingredient of the offence is a deliberate attempt to evade duty either by fraud or misrepresentation, the statute requires ` mens rea ' as a necessary constituent of such an offence. But when factually no fraud or suppression or mis -statement is alleged by the revenue against the respondent in the show cause notice the imposition of penalty under Section 11 AC is wholly impermissible.

Income Tax

Sec 194C vs 194J - payment for hiring of equipment for movement of cargo - Whether technical services availed by service provider from non-resident necessarily makes the services provided to assessee technical in nature, covered under provisions of Sec 194J ? - NO, says ITAT

THE issue before the Tribunal is - Whether technical services availed by the service provider from non-resident makes the services provided to the assessee also technical in nature and is therefore covered under the provisions of Sec 194J and not Sec 194C . NO, rules the Tribunal.

Central Excise

MODVAT Credit on Export Goods - No Credit when the goods were exported without duty : Supreme Court

AN entitlement to Modvat credit will arise only if excise duty is incident upon the final product. The final product in this instance refers to the finished goods ( PP fabrics) that were exported under the Advance Licensing Scheme without any payment of duty. Therefore, the attempt of the assessee to justify its availing of Modvat credit is seriously undermined by the provisions in Rule 57A .

See our columns Tomorrow for the judgements