Jurisprudentiol – Friday's cases

By Vijay Kumar

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

Fabrication of Nitrogen/Oxygen plant at premises of customer using goods manufactured and cleared from factory on payment of duty and bought out items received at site - prima facie applicants have made out a strong case in their favour in view of provisions of Notification no. 67/95-CE, as notification provides exemption to capital goods manufactured in factory of production and are used in manufacture of excisable goods - Pre-deposit waived: CESTAT

THE applicants manufacture excisable goods viz. Air separation column/unit; Expansion engine; Liquid oxygen pump and Liquid nitrogen pump and clear the same on payment of appropriate duty. Show cause notices were issued to applicant on the ground that the applicants are not paying appropriate duty in respect of the Nitrogen/Oxygen Plants. The adjudicating authority confirmed the demand on the ground that fabrication of Nitrogen/Oxygen plant amounts to manufacture and is liable to duty since the fact was that consideration for setting of the above mentioned plants were received by the applicant.

Income Tax

Whether, for determining nature of income arising from sale of shares, Purpose Test is critical, and hence where purpose is to earn profits in future, such income is taxable as business income - YES: ITAT

ASSESSEE is an Investment Company, earning income from dividend, interest, and capital gain - filed its ROI declaring income under the head capital gain after claiming the benefit of Indexation - During the course of assessment proceedings the AO observed that the assessee had purchased shares of a Company(M/s MABL) which was accumulating losses from last several years - the AO further observed that the share capital of that Company was meager around Rs 800/- only a few years ago - the AO further observed that the MD of the assessee Company was managing the affairs of that Company in the capacity of the Director - the AO thereafter observed that assessee had borrowed huge funds for acquiring shares of MABL - in view of this factual backdrop the AO formed an opinion that the income arising from the sale of the shares was taxable as business income and not capital gain

Customs

Burden lies on appellant to establish that provisions of Chapter II of PC Rules requiring them to affix MRP are not applicable to packaged commodity imported by them - matter remanded to original authority for deciding matter afresh: CESTAT

THE appellant imported a consignment of Hot Melt Adhesive DT 3984 A 20 kg, a pressure sensitive adhesive. A Bill of Entry classifying the product under Chapter Heading 35 of the Customs Tariff was filed by the appellant for the clearance of the said goods packed in 7000 cartons.

A view was taken by the department that the appellant is required to pay CVD on the imported goods based on MRP as the goods were imported in 20 kg packing without any MRP declared on the imported package. The department determined the MRP of the imported goods as CIF price x 2.5. The appellant filed an appeal against the assessed Bill of Entry before the Commissioner of Customs (Appeals) but the same was rejected.

See our columns Tomorrow for the judgements