Jurisprudentiol – Monday's cases

By Vijay Kumar

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

Detention of Goods - No Time Limit for issue of detention order - detained goods to be released within six months if no Show Cause Notice issued: HC

DETAINED goods are to be released within six months if no Show Cause Notice is issued, but what happens if no detention order is issued at all? Nothing! There is no time limit for issue of detention order..

Interest Tax

Whether interest earned on trade advance given by credit institution for purchase of machinery, which suffers delays in delivery, is covered by definition of 'interest' u/s 2(5A) - NO, rules Madras HC

ASSESSEE is a Finance Company. It received interest on the advance made to the manufacturer in respect of the purchase of goods in relation to the Hire Purchase/lease agreement entered. AO observed that the advances made for the purchase of the goods amounted to loan and advance and hence, the interest earned was liable to be Interest Tax. The issue before the Bench is - Whether the interest income earned on advance given by a credit institution towards purchase of machinery for which the delivery is delayed, is covered under the definition of “interest” as defined u/s 2(5A). NO, rules the High Court.

Central Excise

When deduction on account of bank charges are available, therefore, whether the charges are for local cheque discounting or outstation, does not make any difference – Deduction allowable from assessable value for the period prior to 01.07.2000: CESTAT

THE appellants are the manufacturers of cocoa and cocoa products, chocolates etc. In the price-lists filed for the period April 1994 to December 1996 they claimed deduction on account of equalized freight, additional sales tax, turnover tax, transit insurance, octroi and cheque discounting charges. While finalizing these provisionally approved price lists, the deductions were denied by the jurisdictional authorities.

See our columns Monday for the judgements