Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Wagons are classifiable under chapter 86 of CETA, 1985 and cannot be considered as capital goods or as components, spares and accessories of specified capital goods - directed to make pre-deposit of Rs.1.09 Crores: CESTAT

THE applicants are receiving duty paid cement in bulk from M/s ACC Ltd. and the same is packed into bags and sold to the customer. The activity of repacking amounts to manufacture as per the provisions of section 2(f) of the Central Excise Act, 1944. The applicant purchased duty paid wagons and availed CENVAT credit by treating the same as capital goods. The jurisdictional authorities denied the credit on the ground that the wagons are classifiable Chapter 86 of the Central Excise Tariff, which is not covered under the definition of capital goods under the provisions of Rule 2(a) of CENVAT Credit Rules

Customs

IC Diesel Engines notified under rule 3 of Drawback rules for purpose of All Industry Rate of drawback - Both, appellant and department committed an error in applying for and sanctioning of brand rate of draw back under rule 6 - CESTAT.

THE appellant are manufacturer and exporters of IC Diesel Engines. During the period from May, 2005 to December, 2008, they exported the said goods under advance licence-cum-draw back scheme and from December, 2008 onwards under draw back scheme. The appellant applied for determination and sanction of drawback for the goods exported during May, 2005 to January, 2010 under Rule 6(1)(a) of the Draw Back Rules and the Jurisdictional Commissioner of the Central Excise determined the amount of draw back in respect of the said goods under Rule 6(1)(b) based on the declaration made in the application for fixation of brand rate and draw back was sanctioned and paid to the appellant.

Income Tax

Income tax - Whether in case of reassessment law mandates that reasons recoreded must be served alongwith Sec 148 notice to assessee - NO, rules Delhi HC

THE issues before the Bench are - Whether at the time of issuing the notice to reopen the assessment, the Assessing Officer is only expected to form a prima facie or tentative belief that income chargeable to tax had escaped assessment and whether there is no requirement under the Act in section 148(2), that the reasons recorded must be served alongwith the Sec 148 notice. And the verdict goes agaisnt the assessee.

See our columns Tomorrow for the judgements