Jurisprudentiol – Tuesday's cases

By Vijay Kumar

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

Import of Zircon Sand - Benefit of Exemption under Notification No.4/2006-C.E for payment of CVD - Notification provides for exemption to Ores but not for concentrates - Dispute regarding Zircon Sand is Ore or Concentrate - During pendency of appeal before CESTAT, imported consignments ordered for clearance on payment of 25% of duty amount and on execution of a bond to pay assessed amount: HC

THE benefit of exemption is available to Ores but not for Concentrates – Dispute regarding Zircon Sand is Ore or Concentrate - In the test report of the samples, a strange view was sought to be taken that Zircon content is 98.3% and the product thereof is Zircon concentrate - Retest of samples not allowed - The proper officer held that the product in question is "Zircon concentrate" and not exempted under Notification No. 4/2006-CE - Commissioner (A) upheld the order of the Deputy Commissioner - Appellants filed appeal before CESTAT, which is pending – Other importers clearing ‘Zircon Sand' without payment of CVD through other ports - Under the existing law, so long the decision passed by the Commissioner (A) is not set aside by the higher appellate authority, the petitioner is bound to pay the duty imposed in order to clear the imported goods - At this stage, there is no alternative remedy prescribed by law - the petitioner is required to run its business in a disadvantageous situation by selling its product at a comparable lower profit than the one earned by the other competitors in the field who will clear the same goods from other ports not situated in this State without payment of the CVD.

Income Tax

Whether when UTI units held by assessee for long period get converted into tax-free bonds by a Govt decision, such conversion amounts to transfer, and losses resulting from such transfer are allowable - NO, rules ITAT

ASSESSEE is a Company engaged in the business of manufacturing of automobiles tyre tubes, valves and accessories. It filed its ROI claiming long term capital loss. The assessee was keeping certain units of UTI and by flux of time these units were converted into tax free bonds by the Govt. As a result of which the assessee suffered these losses. The Assessee claimed these losses as capital loss. The AO during the course of assessment proceedings disallowed these losses on the ground that for capital loss there must be a transaction of transfer behind the transaction and further the losses attributable to those income which did not form part of total income were not allowable. The CIT(A) affirmed the finding of the AO.

Central Excise

Waiver of pre-deposit does not fall under any of enumerated categories in Sec 22 of Sick Industrial Companies Act - protection thereunder not available to assessee: CESTAT

THE applicants availed credit of Rs.43,62,547/- without any duty paying documents and remaining credit on the strength of Xerox copies of invoices. In these circumstances, it is not a case for total waiver of dues. The Hon'ble Supreme Court in the case of Metal Box India Ltd. vs. CCE, Mumbai (2003-TIOL-66-SC-CX) held that waiver of pre-deposit covered under Sec.35F of the Central Excise Act does not fall under any of the enumerated categories in Sec.22 of the Sick Industrial Companies (Special Provisions) Act, 1985, protection thereunder not available to the assessee.

See our columns Tomorrow for the judgements