Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Customs - Exports - Mis-declaration - Confiscation upheld; Penalty and Fine reduced – Letter given to Magistrate not taken as retraction of Statement: CESTAT

The appellant company filed two Shipping Bills both dated 3.4.2003 for export of 9900 pieces of Woven trousers valued atRs.500/- per piece. The total declared FOB value of the goods wasRs.49,50,000/- with a claim of draw back ofRs.5,94,000/-. The appellant company also filed four shipping Bills all dated 3.4.2003 for export of 6120kgsof articles of Nickel Welding Electrodes with declared value ofRs.400/- per kg. The total declared FOB value was Rs.24,48,000/- with a claim of drawback ofRs.3,42,720/-. Both these consignments were consigned to a buyer in Russia .

Income Tax

Income tax - Sec 32 - Is depreciation allowable even when a unit in factory is completely closed, and there is no plan to revive the same? - NO, says ITAT

The assessee company is engaged in the manufacturing and dealing in snack foods, edible oil and MEG/DEG/TEG. It wanted to carry out major modification to its MEG plant. It treated all costs incurred in doing so to work in progress account. The unit started trial production in FY 1993-94. Trial production was carried out up to FY 1997-98 relevant to AY 1998-99. On 29.3.1996, the MEG division was closed. Thus, there was no use of the assets of MEG unit during the previous year relevant to AY 1999-2000. In AY 1999-2000, the assessee capitalized the value of work-in-progress account of MEG Unit and claimed deprecation. Thus, the assessee till such capitalization had treated the line of business as not having been set up.

Service Tax

Service Tax –GTA - Payment of Service Tax on GTA by Abu utilizing Credit earned on GTA - Permissible prior to 19.04.2006: CESTAT

In other words, a s far as the issue in question is concerned to the extent it related to the period prior to 19/04/2006, the consistent view taken by the Tribunal is that in view of the explanation clause the assessee would be entitled to avail the benefit of such service tax in order to claim theCENVATCredit thereof.

See our columns Monday for the Judgements.