Jurisprudentiol - Friday's cases

By Vijay Kumar

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

Capital goods used for a period of 2 to 4 years cannot, be stated to be sold "as such" capital goods - appellant was not liable to pay excise duty in accordance with Rule 3(5) of CCR, 2004 when it removed used capital goods in June/July, 2007 - since there is no liability to pay excise duty, consequently the goods are not liable to be confiscated - no question of payment of any penalty or interest: Delhi High Court

THE appellant is engaged in the manufacture of chewing tobacco and availing CENVAT credit on capital goods. In the months of June and July, 2007, it sold the capital goods such as "old used filter pouch packing machine", "old used HFFs machine PK 85", "old used dust collector", "old used packing and sealing machine", "old used air compressor", "old used grinder" and some other used machines to its sister concern, viz., Harsh International (Khaini) Pvt. Ltd., but did not pay any excise duty thereon/reverse CENVAT credit it had availed at the time of purchase between 2003 to 2005, taking the position that Rule 3(5) of the Cenvat Credit Rules, 2004 did not warrant the same.

Income Tax

Whether when salary of assessee, an MLA, falls under head 'income from other sources' and is exempt u/s 10(14), any deduction can be claimed for expenditure under Sec 57 - NO: ITAT

ASSESSEE is an individual. He filed his ROI for Assessment Year 2007- 08, declaring income of Rs. 1,28,330 on 9.3.2009. The return was processed and the case was taken up for scrutiny by issue of notice under section 143(2) and 142(1). The AO noted that during the relevant period, the assessee was an MLA drawing pension, salary and other allowances from the Govt. of Karnataka. The assessee had claimed exemption of expenses to the extent of Rs 4,37,881. The Assessing Officer after examination of the assessee's claims and income tax provisions, allowed the exemption amounting to Rs 1,61,400, but also disallowed the balance amount. Besides this, a gift of Rs. 15 lakhs allegedly made by the assessee to his son Sri B.N.Vijay Kumar was treated as an unexplained cash credits under section 68 of the Act and brought to tax in his hands. The AO accordingly completed the assessment by an order under section 143(3) of the Act on 26.12.2009 determining the total income of the assessee at Rs. 19,04,811. Against the order of the AO, the assessee filed an appeal and the CIT(A) dismissed the assessee's appeals on both issues of dispute (i) being the claim for exemption of expenditure under section 10(14) and 10(17) and exemption under section 57 of the Act and (ii) unexplained gift of Rs. 15 lakhs by order dt.27.12.2010.

Customs

Drawback in respect of duty paid on importation - In case Commissioner of Customs or any other authority was not competent to condone delay and the delay could have been condoned by Board, petitioner should have been informed and asked to approach the Board: Delhi High Court

IN the present case, the Assistant Commissioner had issued the refund order after examining the facts vide order dated 16.06.2004. The authorities/ impugned order may be right that the refund claim was beyond the statutory period and therefore the refund was wrongly made, but they ignore the fact that the petitioner had filed an application dated 27.05.2003. The said application was required to be dealt with by the competent authority. It is accepted that the power to condone the delay beyond three months is with the Board. It will be appropriate in case the petitioner files an application for condonation of delay under Rule 7A.

See our columns Tomorrow for the judgements