Jurisprudentiol – Thursday's cases

By Vijay Kumar

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

Short payment is not default - Payments made through CENVAT credit during defaulting period also becomes good payment once default is made good by paying the defaulted amount along with interest: CESTAT

HERE is good news for central excise assessees. If a manufacturer fails to pay duty by the due date and the extended grace period of 30 days, then according to Rule 8(3A) of the Central Excise Rules, the assessee is barred from utilising the CENVAT Credit for payment of duty during the default period and the duty has to be paid on each consignment. Further, till the dues are cleared, the goods cleared will be treated as cleared without payment of duty and the consequences and penalties will follow.

However, even in cases where the assessee pays duty by due date and default only part of the duty, department has been treating such short payment also as default of duty and is pressing the provisions of Rule 8(3A) by denying the CENVAT Credit during the default period. This view is also supported by the decision in (2011-TIOL-65-CESTAT-DEL)

In the present case, the Tribunal has taken a different view and held that the short payment and default are not one and the same.

Income Tax

Whether income from running ICDs and CFSs qualifies for deduction u/s 80IA(4)(i) of the Act - YES: Delhi HC

THE assessee is a public sector undertaking, registered as a company u/s 617 of the Companies Act, 1956 and is functioning under the direct administrative control of the Ministry of Railways. It was engaged in the business of handling and transportation of containarised cargo. The activity of the assessee was carried out mainly on its Inland Container Depots (ICDs), Central Freight Stations(CFSs) and Port Container Terminals (PCTs) which were spread all over the country. The assessee has a total of 45 ICDs. The question in the instant case was whether the income from ICDs qualify for the deduction u/s 80IA(4)(i) of the Act read with the Explanation (d). Out of the total of 45 ICDs operated by the assessee, except two ICDs, all others were notified by the CBDT vide notification No.S.O.744(E) issued on 1st September, 1998 for the purpose of Section 80IA(12)(ca). The power to notify infrastructure facilities for the purpose of the Section was taken away from the CBDT with effect from 1.4.2002.

Customs

In U.K, registration of motor vehicles bought for export is a requirement mandated under law - Findings of facts by Settlement Commission that car was a new vehicle cannot be faulted: HC

THE Commissioner of Customs (Import), Mumbai is before the Bombay High Court with a Writ Petition against an order passed u/s 127C(5) of the Customs Act, 1962 by the Settlement Commission.

The Respondent imported a Ferrari and claimed the benefit of exemption notification 21/2002-CUS dated 1 March 2002 on the basis that it was a brand “new” vehicle.

The DRI commenced an investigation and it was revealed that the vehicle was second-hand as it was registered with the Driver and Vehicle Licensing Agency (DVLA) in the United Kingdom prior to its importation.

See our columns Tomorrow for the judgements