Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Refund - Non-challenge of assessment Order - Proper Officer required to pass speaking order when assessment is contrary to Claim of importer/exporter - Matter Remanded: HC

A duty is cast upon the proper officer to pass a speaking order within 15 days from the date of assessment of the bill of entry or the shipping bill, except the cases where the importer confirms his acceptance of the assessment in writing; In spite of specific protest lodged by the appellant within 15 days from the date of assessment of the bill of entry, no order in terms of sub-Section 5 of Section 17 of the Act has been passed and as such, the Tribunal erred in law in rejecting the claim of refund.

Income Tax

Whether expenses incurred on removal of encroachers and their rehabilitation is revenue expenditure as payment is to facilitate smooth functioning of business - YES, rules Delhi High Court Full Bench

ASSESSEE, Airport Authority of India (AAI) took over the functions of management of certain airports and other allied activities. On some of these airports, illegal encroachments were found in and around the security area of the airports. Schemes were devised to rehabilitate the encroachers and the money required for rehabilitation. Assessee had been making provision for the expenditure to be incurred in removal of encroachers and incurring the expenditure for the said purpose from time to time. AO disallowed the said claim and added to the income. CIT (A) as well as ITAT confirmed the addition.

Central Excise

Levy of interest upon finalization of assessment – In entire scheme of Rule 7 of CER, 2002, there is no indication that when an assessee is permitted to pay duty in pursuance of a provisional assessment order, if he is dealing with more than one goods, they have to be treated separately - Karnataka HC

EVEN though duty payable under the Act is to be calculated under each head in each case, ultimately it is the total duty payable for all the goods which is the subject matter of provisional and final assessment, which has to be taken into consideration – After final assessment order is passed, if duty paid in terms of provisional assessment is less than duty payable after final assessment, then assessee is liable to pay interest on short fall – In the instant case, after final assessment adjudicating authority held that there is short payment of Rs. 10.63 lakhs and excess payment of Rs. 1.77 crores – Since assessee has paid Rs. 1.66 crores in excess, interest payment does not arise – Treatment of duty payment under two categories and the approach by the lower authorities in this regard erroneous, unwarranted and not supported by any statutory provision – Impugned order of Tribunal set aside

See our columns Tomorrow for the judgements