Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Subsequent change in prices effected by appellant at depot does not affect assessable value already determined and on which duty liability has been discharged: CESTAT

WHEN the goods are cleared to depot on stock-transfer basis from where the goods are ordinarily sold, for the purpose of discharging duty liability at the time of removal of goods from the factory, the price prevalent at the same time or at the nearest point of time at the depot should be ascertained and on that price duty liability has to be discharged. In the instant case, the appellant-assessee has discharged duty liability accordingly. Subsequent change in prices effected by the appellant at the depot does not affect the assessable value already determined and on which duty liability has been discharged. If that is allowed, the very object and purpose of Rule 7 of the Central Excise Valuation Rules will be totally defeated.

Income Tax

Whether assessee is entitled to claim Sec 10A benefits even if foreign exchange fluctuation gain is derived from ECBs and not from export activity - NO: ITAT

ASSESSEE Company had raised external commercial borrowings from its parent company for meeting its working capital requirements, which were reinstated on year-end, which resulted in a notional foreign exchange gain of Rs. 382,15,000/- to the company. After adjusting the loss on export remittance, net income of Rs. 3,52,90,374/- was shown as 'other income' in the profit and loss account and deduction was claimed u/s 10A – AO accepted the claim of the assessee in the order made u/s 143(3).

Customs

Words ‘imported and marketed' mentioned on packages misunderstood by Commr(A) as ‘imported and marked' - This mistake bred other mistakes leading to him virtually adopting the assessee's averments to take a view in their favour - Matter remanded: CESTAT.

THE learned Commissioner (Appeals) misunderstood certain marks found on the packaged commodity. The imported packages had come with the mark "imported and marketed by M/s. NITCO Tiles Ltd.". It appears, the words "imported and marketed" were misunderstood by the appellate authority as "imported and marked". This misunderstanding lead the appellate authority to the erroneous notion that the importer had to be treated as 'manufacturer' in India on account of having "marked" the packages. This mistake bred other mistakes also, like pressing into service Rule 2(h) (definition of 'manufacturer') and claiming support from the apex court's judgment in Hyderabad Industries case.

See our columns Tomorrow for the judgements