Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Compounding of offence - Compounding amount to include duty, penalty and interest - Compounding is an option and conditions are to be fulfilled - Proviso to Rule 4(3) of Central Excise (Compounding of Offences) Rules upheld: HC

THE concept of compounding is different under the Code of Criminal Procedure and, therefore, the fixation of the amount is rigorous. Section 9A makes every offence non-cognizable notwithstanding anything contained in the Code of Criminal Procedure. That apart, in a non-cognizable offence, if a person tries to get the benefit to avoid a criminal prosecution, he has to satisfy the conditions precedent. It is optional. It is not statutorily mandatory that the person should apply for compounding. Whether or not to apply for compounding is the wish of the person concerned.

Income Tax

Whether when someone else deducts tax at source from payments made on behalf of assessee, it can be said that assessee has discharged its liability u/s 194C - NO, rules ITAT

THE issues before the Tribunal are - Whether, for attracting the provisions of Sec 194C, the presence of an express agreement vis-à-vis transportation charges, is a condition precedent; Whether liability of section 194C can be said to have been discharged if someone else deducts tax at source from payments made on behalf of the assessee and whether when assessee has diverted interest bearing funds to its sister concerns without charging any interest, disallowance of interest after allocation of interest bearing funds to tax free unit and non tax free unit is tenable, particularly for the period when the commercial production has not commenced. And the verdict goes against the assessee.

Customs

Import of Silk fabrics from China - Samples drawn by department and Testing done to ascertain the weight to determine if Anti Dumping Duty is leviable on this import - Anti Dumping Duty also paid by petitioner. Goods directed to be released within one week: HC

HIGH Court directed the department to release the goods within a period of one week. Further, High Court held that as far as payment made of Anti Dumping duty is concerned, it depends upon the final decision to be arrived at based on the adjudication of the show cause notice issued in this regard.

Central Excise

Law does not provide for any exclusion or prohibition to carry forward accumulated CENVAT credit when DTA unit is converted into a EOU or a EOU unit is converted into a DTA unit: CESTAT

UNDER the CENVAT Credit Rules, both 100% EOUs as well as DTA units are entitled to avail CENVAT credit of duty paid on inputs/input services and utilize the same for payment of excise duty on excisable goods manufactured and cleared from such units or for payment of service tax on the output service rendered by such units. The law does not provide for any exclusion or prohibition to carry forward accumulated CENVAT credit when a DTA unit is converted into a EOU or a EOU unit is converted into a DTA unit either in Rule 10 of the CENVAT Credit Rules or any other provisions of the said Rules.

See our columns Tomorrow for the judgements