Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Penalty - Duty paid before Show Cause Notice - Matter remanded for reconsideration in view of observations made by Supreme Court in Dharamendra Textile Processors case: SC

THE issue in this appeal is, whether penalty and interest can be levied and collected when the duty has been paid before the issue of Show Cause Notice under the provisions of the Central Excise Act, 1944. Counsel appearing for the assessee would submit that though the issue is now covered by the decision of this Court in the case of Dharamendra Textile Processors, the matter requires to be remitted to the Tribunal for fresh consideration and decision.

Income Tax

Whether expression 'any other person' in Sec 269 excludes Directors of assessee company which accepts loans or deposits - NO; Penalty upheld: Delhi HC

IN the course of assessment proceedings, the AO noticed that a sum of Rs. 66.50 lakhs was shown to have been received by the assessee from three persons by way of unsecured loans. What was significant was that, out of the said amount of Rs. 66.50 lakhs, a sum of Rs. 23.25 lakhs was received by the assessee from the said three persons in cash / bearer cheques in excess of the limit of Rs. 20,000/- laid down in section 269SS of the Income Tax Act, 1961. Inasmuch as the Assessing Officer felt that loans to the extent of Rs. 23.25 lakhs had been received and accepted by the assessee company in a manner prohibited by section 269SS of the said Act, he initiated penalty proceedings under section 271D of the said Act.

Customs

Asphalt Hot Mix Plant imported by appellant for construction of roads in UP consequent upon winning contract but diverted and used in state of Rajasthan and Tamilnadu as a sub-contractor - Pre-deposit Ordered: CESTAT

IN the year 2006, the appellant imported one unit of "Asphalt Hot Mix Plant Batch Type MSD 2000 Capacity 160 TPH"and claimed the benefit of duty exemption amounting to Rs. 73,00,663/- under serial no. 230 of notification 21/2002-Cus dated 01.03.2002 as amended. Investigation carried out by the department in 2008 revealed that the appellant did not use the imported equipment for construction of roads in the State of UP at all but had diverted the same and used the equipment for carrying out construction of road in the State of Rajasthan as a sub-contractor of Punj Lloyd Ltd., and thereafter, since November 2008, the imported equipment was shifted to Chidambaram in Tamilnadu for carrying out a contract of road construction for M/s Oriental Structural Pvt. Ltd. as a sub-contractor.

See our columns Tomorrow for the judgements