Jurisprudentiol - Monday's cases

By Vijay Kumar

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

Argument that since customs officers loaded value once at time of imports to a certain extent further proceedings cannot be initiated by DRI can turn out to be one of best means to evade customs duty with impunity - provisions in Customs Act are not that weak - such an argument is not based on any provisions in statute a nd appears to be not consistent with section 28 of Customs Act - appellants were mere conduits for arranging inputs at under declared prices - revision of value and consequent duty liability upheld: CESTA T

AT the time of initial assessment of goods customs suspected under valuation of the goods, particularly the main item, namely PCB. For goods with declared value varying from HKD 20 to HK D 30 per piece the customs department loaded the value to values in the Range of HKD 20.50 to HKD 42.75 in different consignments. But later the Directorate of Revenue Intelligence did more investigations and they were of the view that the under valuation was to a much higher extent.

Income Tax

Income tax - Whether approvals granted under the Income Tax Act, 1922 to educational institutions for conducting scientific research, is valid under present Act - YES, rules HC

THE issues before the Bench are - Whether when the inquiry is dropped after the assessment is completed based on thorough scrutiny of records, such assessment can still be reopened after the expiry of four years; Whether expenditure on scientific research already allowed, can be disallowed at a later stage, when the AO after due application of mind had previously found no reasons for disallowing such deductions.

Service Tax

ST - Accounting Standard (AS) 7 is for ascertaining the profit and loss of a construction company and does not straight away reflect position of receipt of payments which is relevant factor for paying service tax - Amounts received against taxable activities can be arrived at only if accounts are examined by a person having some knowledge about accounting methods - amount confirmed without due diligence - Pre-deposit waived and Stay granted: CESTAT

THE appellants are registered with the department for payment of Service Tax in respect of services of Construction of Residential Complexes. Pursuant to audit conducted, it was found that there was a difference between gross receipts shown in the profit and loss account and the value of service rendered by them as declared in their service tax return. Alleging that there was a short payment of Service Tax, a demand was issued which culminated in an order by the CCE, Meerut confirming tax amount of Rs. 67,20,597/- along with interest and penalties under sections 76 and 78 of the Finance Act, 1994.

See our columns Monday for the judgements