Jurisprudentiol - Thursday's cases

By Vijay Kumar

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

EOU - Goods manufactured by EOU out of raw materials supplied by another EOU and subsequently cleared to DTA - Eligible for benefit of Notification No.8/97-CE; An exemption notification has to be interpreted in light of words employed by it and not on any other basis: Supreme Court

A provision especially a fiscal statute providing for an exemption, concession or exception has to be construed strictly. A person who claims exemption or concession must establish clearly that he is covered by the provision(s) concerned and, in case of doubt or ambiguity, the benefit of it must go to the State. The notification requires to be interpreted in the light of the words employed by it and not on any other basis. There cannot be any addition or subtraction from the notification for the reason the exemption notification requires to be strictly construed by the Courts. The wordings of the exemption notification have to be given its natural meaning, when the wordings are simple, clear and unambiguous.

Income Tax

Whether essence of law for availing Sec 54F benefits is to ensure that capital gains earned by the assessee are invested in residential house irrespective of unfinished construction within 3 years - YES: High Court

THE AO came to the conclusion that the construction was not complete even after lapse of three years of time from the date of transfer of the shares on which the capital was derived. He held that the assessee had neither purchased the property within the period of two years nor constructed the property within the period of three years after the date of transfer of the asset, on which the capital gain was derived, and Section 54F was not applicable to the assessee. The CIT(A) held that the house which the assessee intended to purchase/construct was not even fit to be called a house, not to speak of residential house. It was neither purchased nor constructed in the true sense of the terms. Hence, the assessee was not eligible to the benefit u/s 54F. The Tribunal was of the opinion that the authorities below were not justified in depriving the exemption legitimately claimed by the assessee u/s 54F.

Customs

Appeal dismissed by Tribunal for non-compliance under Section 129 E of Customs Act, 1962 – Party appeal against CESTAT order dismissed by High Court – Since the interim order of CESTAT has merged with High Court order on appeal, Tribunal becomes functus officio and cannot restore the appeal though pre-deposit was made later: Delhi HC

IN this case, the Tribunal ordered the respondent exporter to pre-deposit Rs 2.5 crores within eight weeks as a condition for hearing the appeal on merits. The issue involved in irregular claim of drawback of Rs 22 crores. Since the respondent failed to deposit the amount, the Tribunal dismissed the appeal for non-compliance with the order of pre-deposit.

See our columns Tomorrow for the judgements