Jurisprudentiol – Tuesday's cases

By Vijay Kumar

Customs

Exemption from Customs duty - SFIS scrip was valid only upto 30th April, 2011 – as the goods had landed at ICD, Faridabad only on 26th May, 2011 action of the department directing payment of full duty and refusal to give the benefit cannot be characterized as unreasonable: High Court

THE petitioner availed of the facility of the customs duty exemption in terms of the SFIS (Serve From India Scheme) and had entered into contract for purchase of certain equipment from Italy on 18.4.2011. The scrip had been issued to the petitioner on 15.04.2009 and was valid in terms of the scheme till 30.04.2011. The goods were shipped on 18.04.2011 from Antwerp and landed at the Inland Container Depot, Faridabad on 26.05.2011. By this time, the validity of the scrip had expired. The petitioner was, therefore, required to pay duty. The petitioner's request for revalidation of the scrip under the SFIS was turned down by the Policy Relaxation Committee (PRC) on 29.08.2011.

Income Tax

Income tax - Whether when unabsorbed depreciation of amalgmating company cannot be carried forward u/s 32(2), Explanation 3 to section 43(6) can also not be applied in such a case - YES: Madras HC

THE issues before the Bench are - Whether when unabsorbed depreciation of an amalgmating company cannot be carried forward u/s 32(2), can explaination 3 to section 43(6) be applied in such a case; Whether in such a case, the appropriate section is section 43(6) r/w explaination 2(b) which allows unabsorbed depreciation to be carried forward into the books of the amalgamated company; Whether "depreciation actually allowed" in terms of explaination 2(b) of section 43(6) includes "unabsorbed depreciation" of the amalgamating company; Whether the option of carrying forward of "unabsorbed depreciation" of the amalgmating company is also available within the scope of section 72A; Whether amalgamated company can be allowed the benefit of investment allowance, when no such allowance was created by the amalgamating company and Whether expenses incurred in raising funds for expansion projects can be amortised as preliminary expenses, when such proceeds are invested on an interim basis, pending government approval for the projects.

Service Tax

CESTAT granting unconditional waiver of pre-deposit of Interest and Penalty on the submission made by the appellant that they had paid the entire amount of Service Tax demand of Rs.18 Crores – on verification, it was found that only Rs.6 Crores had been paid – Order recalled and appellant directed to pay balance amount of ST along with 25% penalty – Contempt proceedings initiated for misleading the Bench: CESTAT

CESTAT had granted an unconditional waiver of pre-deposit of Interest and Penalty subject to the verification of the submission made by the applicant that the entire amount of Service Tax of Rs.18,08,18,228/- had been paid. In the verification report submitted by the Revenue representative it was mentioned that out of the total demand of Rs.18,08,18,228/- the appellant had deposited only Rs.6,24,21,219/-.

See our columns Tuesday for the judgements