Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Fraudulent re-import of goods at inflated value - Value for demanding customs duties is value at which goods were originally exported: CESTAT

THE facts of the case are interesting. One popular financing company and a popular Bank have separately financed certain importers under lease agreements entered with them. The goods were imported under exemption under EOU scheme by availing benefit of exemption under Notification Nos 13/81 dated 9.2.81 and 53/97-Cus. Dated 3.6.97. The declared value of the goods was Rs 30 crores and 25 crores respectively in the two cases. On investigation by DRI, it was found that the goods were originally exported from India at much lesser value and the goods were actually not capable of being used in the EOU as declared. Hence demand of customs duty was confirmed on the ground of mis-declaration, jointly and severally on the financing company / Bank and the importing parties. In addition to confiscation of the goods, penalties were also imposed.

Income Tax

Whether when assessee has a complicated case and demand is not yet quantified, even then powers u/s 281B can be invoked for attaching property to safeguard Revenue's interests: NO: HC

ASSESSMENT was made by the AO u/s 143(3) r.w.s 153A making additions in the returned income against which writ was filed and the High Court directed the CIT (A) to decide the appeal expeditiously and till then no coercive action be taken against the assessee. However, the appeals were disposed of as the post of the CIT (A) was lying vacant since long and the CIT (A) had not taken the charge. In the regular assessments, the returned income was accepted and assessed. However, in the search proceedings, the additions were made based on certain incriminating documents found during search. Assessee contended that the Department did not proceed to determine the liability, which should had been done only within 21 months from the date of getting the incriminating documents under the search and seizure operation in the financial year when the search was conducted u/s 132. Since the department did not take any steps to determine the liability and when the period of limitation was about to expire, Section 142(2A) was invoked, just 4 days before expiry of the limitation period for completion of the assessment.

Service Tax

Earlier better principle should be adopted for classifying service - since ‘Manpower Recruitment or Supply Agency Service' came into Service Tax net before ‘Ship Management Service', prima facie , appellants are liable to discharge Service Tax liability under category of ‘Manpower Recruitment or Supply Agency Service': CESTAT

FROM the activity undertaken by the appellant, it is clear that they have supplied Master, officers and crew on board the vessels for their clients and the person so supplied have the required qualification for undertaking the work. It is also clear that the manpower so supplied remained employees of the appellant and the appellant received consideration for the services so rendered, both by way of emoluments of the employees and also consideration for the services rendered. Thus, even during the period prior to 1.5.2006, the activity undertaken by the appellant is squarely covered under the definition of ‘Manpower Recruitment and Supply Agency Services'.

See our columns Tomorrow for the judgements