Jurisprudentiol – Monday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Kerala Sales Tax

Margarine is edible oil - eligible for concessional tax of 4 percent: SC

NORMALLY anything, which is used for preparation of a food article, is edible because ultimately it is being consumed by human beings. Though one may not consume margarine directly or may not use for normal cooking, the fact is that margarine is used for preparing bakery items, which are consumed by human beings, and, therefore, margarine is also edible. Having around 80% fat, and being in the nature of oil, it should be considered as edible oil. Intention of the government was to give relief in tax to edible oils.

Income Tax

Whether, when assessee deals in sale of imported timber, interest income earned from FDs with banks is to be treated as business income - NO, rules HC

THE assessee is engaged in the business timber import and sale. The assessee received a sum of Rs.7,92,451/- by way of interest on Fixed Deposits. The assessee also had interest income earned on the money lent to other parties.

THE issues before the Bench are - Whether, when the assessee deals in sale of imported timber, interest income earned from FDs is to be treated as business income and whether interest earned from the advances is to be assessed under the head "income from other sources" when the object of the business was not money lending. NO is the High Court's answer to both the questions.

Customs

Anti Dumping Duty - Different Tariff Heading numbers mentioned in initial notification and final notification after sun set review - Latter one correct - No stay - DA should take a Customs Expert to avoid such faux pas: CESTAT

THE description of the product namely PVC Paste Resin has remained the same during the original anti-dumping investigation as well as during the Sunset Review. The fact that there was an error in indicating the correct classification in the final finding and the Customs Notification issued after the original anti-dumping investigation, howsoever inelegant that was, does not persuade to stay the operation of the present anti-dumping regime which specifies the product under consideration as well as the Customs classification correctly.

This is yet another case where an avoidable instance of mis-classification by the D.A. It is high time that the D.A. takes on board a trained Customs specialist so that such classification faux pas do not recur.

Central Excise

Scope of method of duty calculation provided under Notification no. 2/95-CE cannot be enhanced or varied by issuing a Circular without amending notification and such amendment came into force only on 01.03.2002 – Payment of 50% of aggregate of duties not warranted during period April 2000 to March 2001 – Appeal allowed: CESTAT

THE appellants are a 100% EOU and they cleared goods to the Domestic Tariff Area (DTA) availing benefit of concessional rate of duty under notification 2/95-CE dated 04.1.1995. The appellants were issued a show-cause notice alleging short-payment of duty of Rs.98,380/- in respect of the clearances made to DTA during the period from April 2000 to March 2001. It was alleged in the show-cause notice that the appellants were liable to discharge duty liability @ 33.54 % of the assessable value whereas they have discharged duty liability @ 31.37% of the assessable value during the period April 2000 to February 2001 and similarly for the period March 2001 they have short paid duty to the extent of 1.99% (i.e. duty payable @ 31.43% minus duty actually paid @ 29.44%).

The original authority confirmed the demand and imposed a penalty of Rs.5000/-. The Commissioner (Appeals) upheld the order and hence the appellant is before the CESTAT.

See our columns Monday for the judgements