Jurisprudentiol – Wednesday's cases

By Vijay Kumar

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

Since appellant had obtained the necessary certificate from competent authority to effect that goods are entitled for benefit of notification, penalty cannot be imposed - Demand upheld and appeal dismissed: CESTAT

THE appellant is before the CESTAT as they have been denied the benefit of Notification no. 64/95-CE dated 16.03.1995 in respect of aluminium alloy rods, aluminium alloy flats and aluminium alloy billets manufactured and cleared to Indian Space Research Organization.

Central Excise – Assessee availing area based exemption notification inadvertently failed to avail certain input credits for a period of four years and availed it subsequently – Whether the trail of transactions adopted by assessee is revenue neutral or not – Member (T) differs with Member (J) on the issue of revenue neutrality – Matter goes to Third Member

THE appellant, a manufacturer of pharmaceuticals has a unit located in Jammu and is availing the benefit of Notification No. 56/2002-CE dated 14.11.2002. As per the scheme of this notification, the assessee availing the benefit of this notification is required to pay duty by first exhausting their CENVAT A/c and then pay the balance amount of duty through PLA. The duty paid through PLA would be refunded to them subsequently by a self credit procedure as entailed in the said notification. From April 2005 to March 2009, the appellant due to an inadvertent mistake did not avail credit of duty paid on furnace oil amounting to Rs. 45.72 lakhs. This amount was taken into their CENVAT A/c on 14.08.2009 and utilized in the month of August 2009 for payment of duty on final products cleared during that month and balance of duty for that month was paid through PLA.

Income Tax

Whether when cost of acquisition of development rights acquired by operation of law is not determinable, sale of such development rights cannot be subjected to capital gains tax - YES, rules ITAT

ASSESSEE is an individual holding certain property in the capacity of co-owner. The original FSI of the property was restricted to 8400 Sqf. Thereafter in 1991 assessee got right to overload this property with additional TDR by virtue of the provisions of Development Control Regulations for Greater Bombay Act 1991. Assessee entered into an agreement with some builder for development of the property and received certain amount in lieu of the sale of the development rights. The AO was of the view that provisions of section 50C would be applicable and hence the value adopted by the Stamp Valuation officer was applicable. The CIT(A) affirmed the action of the AO discarding the submissions of the assessee that provisions of section 50C were not applicable for sale of development rights and second the receipt was not at all taxable under the provisions of Income Tax.

See our columns Tomorrow for the judgements